The rupee saw modest erosion versus dollar in the interbank market last week and lost 12 paisa at Rs 59.26 and Rs 59.29 for buying and selling, respectively. According to market sources, at the end of the first quarter, the rupee managed to resist sharp losses under the guidance of State Bank of Pakistan. However, it managed to gain the same amount versus dollar in the open market at Rs 59.57 and Rs 59.63, whereas it lost 60 paisa versus euro at Rs 73.35 and Rs 73.63 for buying and selling, respectively.
Analysts observed that as rising trend in the global oil prices continued the importing oil bill would increase, which would make dollars dearer in the coming days.
They said that banks were buying dollars to meet the demand from oil companies to settle import payments.
Despite the sharp fall in the rupee value in the interbank market, the State Bank did not intervene to rescue it.
The country's foreign exchange reserves rose to $12.376 billion on $300 million inflow from the World Bank under its poverty reduction programme, the State Bank said.
Tight money supply was also a leading factor behind the firmness in local currency, dealers said. Some exporters visited the market to sell their export proceeds, they added.
INTERBANK MARKET: On September 27, the rupee failed to maintain its firmness versus dollar for buying and selling at Rs 59.15 and Rs 59.17, market men said.
Corporate demand kept the dollar in plus column, but banks' dollar selling in the interbank market helped the rupee to shed its losses, they said.
On September 28, panic buying of dollars continued as the dollar touched the new high mark of Rs 59.25. However, the rupee lost five paisa against dollar for buying and selling at Rs 59.20 and Rs 59.22 in the process of trading, they said.
On September 29, the rupee was stuck up in a tight range in the absence of major demand and fresh motivating factor in the interbank market, holding prevailing levels against dollar for buying and selling at Rs 59.21 and Rs 59.23, respectively.
On September 30, nearly 20-25 million dollars oil payments hurt the rupee's firmness, which lost five paisa versus dollar for buying and selling at Rs 59, market men said.
On October 1, the rupee firmly held its overnight levels for buying and selling at Rs 59.25 and Rs 59.27.
On October 2, slight fall in dollar's demand helped the rupee to check sharp slide at Rs 59.26 and Rs 59.29 for buying and selling.
In the world markets, the dollar tended higher against the leading currencies, dealers said.
OPEN MARKET: On last Monday, despite persistent demand for dollars, the rupee gained eight paisa against at Rs 59.67 and Rs 59.72 for buying and selling, respectively, dealers said.
The rupee gained 15 paisa against euro for buying and selling at Rs 72.75 and Rs 73.05, they said.
On Tuesday, the rupee inched up with two paisa gain for buying and selling at Rs 59.65 and Rs 59.70.
The rupee shed slightly versus euro for buying and selling at Rs 72.80 and Rs 73.10, respectively.
On Wednesday, the rupee maintained its recovery versus dollar, gaining three paisa for buying and selling at Rs 59.62 and Rs 59.67, respectively.
The rupee held its current levels versus euro for buying and selling at Rs 72.20 and Rs 73.10.
On Thursday, the rupee digested the weakness in the interbank market, gaining two paisa versus the dollar in open market for buying and selling at Rs 59.60 and Rs 59.65.
It failed to show any firmness versus euro losing 10 paisa for buying and selling at Rs 72.90 and Rs 73.20, respectively.
On Friday, the rupee gained three paisa versus dollar for buying and selling at Rs 59.57 and Rs 59.62. It, however, lost 45 paisa in relation to euro for buying and selling at Rs 73.35 and Rs 73.65.
On Saturday, the rupee managed to hold its overnight level versus dollar for buying and selling at Rs 59.57 and Rs 59.63 amid improving supply position of greenback.
The rupee held its overnight levels versus euro also for buying and selling at Rs 73.35 and Rs 73.65, respectively.