Higher payment requirements sparked the demand for dollars, causing weakness in rupee versus the US currency last week ending on June 18, 2005. In the inter-bank market, the rupee gave up its firmness, shedding 6 paisa versus dollar, at Rs 59.70 and Rs 59.72, for buying and selling, respectively.
Same trend occurred in the open market as the rupee lost 5 paisa in relation to dollar for buying and selling at Rs 60.45 and Rs 60.50.
The rupee failed to extend its gains versus the euro, as the single European currency started lifting from bottom in overseas markets. The rupee currency lost 50 paisa in terms of euro for buying and selling at Rs 73.90 and Rs 74.20.
Rising demand for dollars for payment of import bills toppled the rupee as the fiscal year was near to close, currency analysts said. They said that the State Bank of Pakistan's (SBP) strict watch over currency fluctuation saved the rupee from sharp decline versus dollar.
Some obstacles in the economic fundamentals caused the weakness in the rupee value and it seemed that the rupee might show some vulnerability in the near future.
According to the Federal Bureau of Statistic, the trade deficit rose to 5.51 billion dollars during the eleven months of the current fiscal year. Some analysts were of the view that the recent corrective measures taken by the central bank was likely to help the rupee to limit its losses versus dollar.
The bank has allowed the authorised dealers to sell their surplus US dollars to the respective field offices of the central bank, the report said.
This factor would definitely ease pressure over the rupee, experts said. In the meantime, they said, the tight liquidity would also help the rupee to hold its firmness against unusual fall versus dollar, they added.
According to a report, the expatriates' remittances during the current fiscal year rose to 3.81 billion dollars.
Agencies said that in the overseas markets the dollar drifted lower on profit-taking as many dollar holders started selling the US currency due to its higher rate, which helped the single European currency to recover some lost ground. Later, it recovered its lost ground and maintained its steadier trend, but at the weekend it shrugged of its upward trend on rising concern about the US current account deficit.
INTER-BANK RATES: On Monday, the rupee lost 2 paisa versus dollar for buying and selling at 59.65 and 59.66, respectively.
Improved demand for dollars pushed the rupee value down in the market. On Tuesday, the rupee shed one paisa in relation to dollar for buying and selling at 59.66 and 59.67, respectively.
On Wednesday, the rupee shed 2 paisa against dollar for buying and selling at 59.67 and 59.69, dealers said.
On Thursday, the rupee shed 2 paisa in relation to dollar for buying and selling at 59.69 and 59.70, respectively.
On Friday, the rupee-dollar parity rates hovered between the band of 59.69 and 59.71 amid tight supply of the local currency.
On Saturday, the rupee moved down slightly versus dollar for buying and selling at 59.70 and 59.72.
OPEN MARKET: On June 13, the rupee managed to gain 50 paisa versus euro for buying and selling at 73.50 and Rs 73.70, while it did not show any change in its weekend's levels against dollar for buying and selling at 60.40 and 60.45.
On June 14, technical support favoured the euro to come out of its recent drifting position in the world markets. In the open market, the euro gained 30 paisa for buying and selling at Rs 73.80 and Rs 74.00.
The rupee-dollar parity rates remained unchanged at Rs 60.40 and Rs 60.45 as dollars' supply was enough to meet the market demand, money dealers said.
On June 15, the rupee dropped 2 paisa versus dollar for buying at Rs 60.42 while it maintained its selling rate at Rs 60.45 on rising demand for the US currency.
The rupee, however, rejected the overnight weakness versus euro, gaining 50 paisa for buying and selling at Rs 73.30 and Rs 73.50.
On June 16, the local currency gave up its firmness versus dollar, shedding 2 paisa on the buying side at Rs 60.45 and Rs 60.50 in the process of lean business, dealers said.
Slight fall was seen in rupee value versus euro for buying and selling at Rs 73.40 and Rs 73.60 as the single European currency managed to improve marginally in the international markets.
On June 17, the rupee managed to hold on to its overnight levels versus the greenback at 60.45 and 60.48, moneychangers said.
The rupee also picked up 20 paisa against the euro for buying and selling at Rs 73.20 and Rs 73.40, respectively.
On June 18, the rupee drifted lower slightly versus the greenback for buying and selling at 60.45 and 60.50, dealers said.