Weak sentiment was seen in the currency market during the week ended March 15, 2008. In the interbank market, the rupee turned weaker in terms of the dollar, losing nine paisa for buying at 62.87 and eight paisa for selling at 62.90.
The rupee, in the open market followed the same trend, losing 10 paisa versus the greenback for buying and selling at 62.85 and 62.95.
The rupee continued its fall versus the euro, dipping Rs 2.05 for buying and selling at 98.05 and 98.15 as the dollar depicted a sharp fall in relation to the major currencies in the world market. The rupee struggled hard to come out of the weak spells, but could not succeed, as the importers rush did not allow it to look ahead. Inflows are not matching the outflows, which may push the rupee down more in the coming days.
As a result of high demand for dollars, according to the State Bank of Pakistan (SBP) weekly data, the country's foreign exchange reserves fell to 14.142 billion dollars, and if its demand accelerate in the near-term. The expected investment by the Saudi companies and some other companies might not be enough to help in easing the supply of dollars. Remittances are increasing by the Overseas Pakistanis but the foreign investment is not showing any promise due to growing uncertainties on the political set-up in the country.
The soaring oil prices in the world market may push the payment bills further up, which will definitely cause rising pressure over the dollars buying. The oil prices were nearing a record 110 dollars in the Asian trading.
INTER-BANK MARKET RATES: On Monday, the rupee lost 12 paisa against the dollar for buying at 62.78 and it also fell sharply on the selling side at 62.82 in process of trading.
On Tuesday, the rupee moved both ways against the dollar as it shed one paisa for buying at 62.79 and it, however, gained the same amount at 62.81. On Wednesday, the rupee lost seven paisa against the dollar for buying and selling at 62.86 and 62.88 in process of trading, they said.
On Thursday, the rupee gained 12 paisa against the dollar for buying and selling at 62.74 and 62.76, experts said.
On Friday, the rupee depreciated by four paisa against the dollar for buying and selling at 62.78 and 62.80, they said. On Saturday, the rupee depreciated by nine paisa against the dollar for buying at 62.87 and it also lost 10 paisa for selling at 62.90 on strong demand for the US currency, they said.
WORLD VALUE OF US CURRENCY: For several weeks now, the dollar has failed to show any improvement against the major currency units. In the opening session of the week, the dollar fell against the yen and the euro on speculation that gloomy economic conditions in the US will prompt the Federal Reserve to slash interest rates next week.
The euro rose to 1.5382 dollars from 1.5335 dollars. Traders said expectations are growing that the Federal Reserve would cut interest rates by 75 basis points to 2.25 percent on March 18, and such a big cut could lift the euro to a new all-time high.
During the second day, the dollar edged up after sliding close to an eight-year low against the yen, as Tokyo share prices gained despite a fall on Wall Street.
The dollar fell to 101.42 yen in early trade, slipping past eight-year low of 101.40 yen, struck on electronic trading platform EBS on Friday, but later trimmed its losses to stand at 101.75 yen, steady from late US trading on Monday.
In the third session of Asia, the dollar slipped after rebounding from record lows against the euro the previous day when the Federal Reserve's new steps to boost banking system liquidity raised hopes for a recovery in strained credit markets.
During the fourth session, the dollar sank to a 12-year low against the yen and hit record lows versus the euro and Swiss franc, sliding on doubts about the effectiveness of the Federal Reserve's efforts to aid strained credit markets.
The dollar tumbled 1.5 percent against the yen to a low of 100.02 yen on electronic trading platform EBS, the lowest since late 1995.
In the final session of Asia trade, the dollar edged up against the yen, lifted by a modest rally on Wall Street, but investors remained nervous about the threat of a US recession, dealers said. The greenback held up above 100 yen, a day after plunging below the psychologically important level for the first time in 12 years.
The dollar was at 100.76 yen in Tokyo late morning trade compared with 100.60 in New York late Thursday, when it earlier dropped to as low as 99.78.
The euro softened to 1.5607 dollars from 1.5624, remaining close to its all-time high of 1.5645. The euro slipped to 157.12 yen from 157.23.
In the New York market, the dollar fell below 100 yen for the second straight day and hit a record low against the euro after Bear Stearns said a worsening cash position had forced the Wall Street firm to secure emergency financing.
OPEN MARKET RATES: On March 10, the rupee shed five paisa in terms of the dollar for buying and selling at 62.75 and 62.85 dealers said.
It extended its week-end fall in relation to the euro, losing 20 paisa for buying and selling at 96.00 and 96.10, they said.
On March 11, the rupee lost 10 paisa in relation to the US currency for buying and selling at 62.85 and 62.95, dealers said. The rupee, however, did not move any side against the euro for buying and selling at 96.00 and 96.10, they said.
On March 12, the rupee extended its overnight fall, losing seven paisa against the dollar for buying at 62.92 and it also shed five paisa for selling at 63.00, dealers said.
The rupee followed the same pattern versus the euro, falling 10 paisa for buying and selling at 96.20 and 96.30, they said. On March 13, the rupee, however, failed to follow the suit in terms of the dollar, losing three paisa for buying at 62.95 and 63.05, dealers said.
The rupee continued its weakness against the euro falling sharply Rs 1.35 for buying and selling at 97.55 and 97.65 amid modest trading, they said. On March 14, the rupee managed to gain five paisa versus the dollar for buying and selling at 62.90 and 63.00, dealers said.
The rupee also showed rising trend in terms of the euro, gaining five paisa for buying and selling at 97.50 and 97.60, they said. On March 15, the rupee maintained rising trend against the dollar, gaining five paisa for buying and selling at 62.85 and 62.95, dealers said. The rupee, however, could not perform well against the euro, falling 55 paisa for buying and selling at 98.05 and 98.15, they said.
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