Sliding trend was witnessed in the interbank market as the rupee crossed its an important mark of Rs 57.50 on the banks' dollar buying last week.
In the interbank market, the rupee lost 15 paisa in relation to the dollar for buying and selling at Rs 57.48 and Rs 57.50, respectively, while in the open market the rupee dropped by the same amount versus the greenback at Rs 57.65 and Rs 57.70.
The rupee, however, was able to gain its strength in terms of the euro on the falling value of the single European currency, and the rupee rose by nearly Rs 1.40 for buying and selling at Rs 70.40 and Rs 70.70, respectively.
The market sources said the interbank market bought dollars from the open market to fulfil its huge payment requirements, adding the rupee is likely to continue its slide versus the greenback due to the same reason.
Currency experts said the rupee would recover its ground on the back of increasing inflows of dollars and emergence of positive developments in the basic fundamentals.
Others were of the opinion that the rupee is likely to recover its lost ground on some supporting factors, saying the country's basic fundamentals started showing signs of improvement as a result of optimistic trend in exports and foreign investment.
According to Finance Minister Shaukat Aziz's statement, in which, he hoped that the country's dependence on the donors might be discontinued from the next year (2004), and in future, he expected that Pakistan would not accept any loan with conditions.
In the meantime, experts said the rising inflation rate and falling trend in the foreign exchange reserves may hurt the rupee's firmness in the coming days.
The inflation rate rose 3.49 percent in July-February in the current fiscal. The foreign exchange reserves dropped by 21 million dollars last week. According to the State Bank of Pakistan statement, the reserve was at 12.565 billion dollars from earlier 12.586 billion dollars.
Some moneychangers said the demand for dollars increased in the market as rates went up in the interbank market, but the erosion was limited on dollars fluent supply. Commenting on the thin business in the currency market at the final sessions, they said the main market players were on the sidelines due to the Indo-Pak cricket match.
According to some currency experts in the world markets, the dollar failed to maintain its upward trend versus the major currencies following the news that the US trade deficit hit a record in January, dealers said.
According to the report, the US trade deficit unexpectedly fell to a record 43.1 billion dollars in January despite an export-boosting fall in the dollar, which should have helped exports.
KERB MARKET RATES: On Monday, the rupee posted two paisa gain in relation to the dollar for buying and selling at Rs 57.45 and Rs 57.55, while it gained seven paisa versus the euro for buying and selling at Rs 71.06 and Rs 71.36, respectively.
On Tuesday, the rupee shed five paisa in relation to the dollar for buying and selling at Rs 57.38 and Rs 57.40, respectively.
The corporate demand came in the market due to some payments which pushed the rates down in the interbank and open markets slightly, experts said adding the rupee lost 38 paisa versus the euro for buying and selling at Rs 71.44 and Rs 71.74, respectively.
On Wednesday, in response to the falling trend of the euro in the world markets, the rupee recovered nearly 80 paisa in terms of the single European currency for buying and selling at Rs 70.73 and Rs 71.03, respectively.
In the meantime, the rupee firmly held its present level versus the dollar for buying and selling at Rs 57.53 and Rs 57.60, respectively.
On Thursday, it tumbled with modest loss of five paisa in terms of the dollar for buying and selling at Rs 57.60 and Rs 57.65.
The local currency came under pressure as banks purchased dollars from the open market, dealers said. The rupee, however, maintained its rising trend versus the euro, gaining 44 paisa for buying and selling at Rs 70.16 and Rs 70.46, respectively.
On Friday, the rupee continued its overnight weakness versus the dollar in the early session, shedding five paisa more for buying and selling at Rs 57.65 and Rs 57.70, respectively.
At final session the rupee eroded early losses to show no changes on the buying and selling counters at Rs 57.60 and Rs 57.65, while it failed to maintain its firmness in terms of the euro, losing nearly 35 for buying and selling at Rs 70.57 and Rs 70.87. AT the weekend, the rupee moved slightly versus the dollar for buying and selling at Rs 57.65 and Rs 57.70. Versus the euro, it posted fresh gain of 15 paisa for buying and selling at Rs 70.40 and Rs 70.70.
INTERBANK RATES: On March 8, the rupee started the week on a firm note, showing no any change versus the dollar for buying and selling at Rs 57.35 and Rs 57.36, respectively. On March 9, it shed three paisa in terms of the dollar for buying and selling at Rs 57.38 and Rs 57.40, respectively.
On March 10, some increased demand for dollars by the corporate sector pushed the rupee-dollar parity down for buying and selling at Rs 57.41 and Rs 57.43, respectively.
On March 11, the rupee continued its downward revision versus the dollar in the interbank market, shedding four paisa for buying and selling at Rs 57.45 and Rs 57.47, respectively.
On March 12, the rupee extended its decline in the interbank market for buying and selling at Rs 57.48 and Rs 57.49, respectively. On March 13, the rupee shed one paisa for buying and selling at Rs 57.48 and Rs 57.50.