The general trend in both the open and the interbank markets was firm as the rupee retained its firmness against the dollar during the week, ended March 3.
In the interbank market, the rupee slipped in terms of the dollar, dropping one paisa for buying and selling at 60.70 and 60.72 respectively in process of trading, dealers said.
The rupee, however, managed to pick up one paisa against the dollar for buying at 60.67 and gained six paisa for selling at Rs 60.72 in the open market, they added.
It, however, fell in relation to the euro, dropping 23 paisa for buying and selling at 79.68 and 79.73, they said. The feature of the week was the single European currency's constant appreciation in the world market, which paved the way for its recovery in the local market as well. At a point, it seemed that it will cross an important mark of Rs 90 against the euro, but it failed to look ahead. Some encouraging news, helped the dollar in the world markets to shed losses versus the major currencies, they said.
Thanks to the healthy remittances from the overseas Pakistanis, which helped the country's foreign exchange reserves to touch the new high with the passage of time, some analysts said.
According to the weekly statement by the State Bank of Pakistan (SBP), for the last several months, the reserves are on the upward march, rising 62 million dollars to 13.343 billion dollars in the week ending February 24, 2007.
Besides, the significant rise in the direct foreign investment (FDI) also gave a significant boost to improve the dollars' supply, analysts said.
In the beginning session of the week, the dollars' value surge in the local market as the falling trend in the Asian share markets, pushed the small investors into the money market as they try to save their investment. Started buying dollars instead of equities, money experts said.
In the short-terms or long-terms, one to all, investors want to save their investments, any uncertainty propelled them to shift their business in the safe side, they observed.
According to the State Bank of Pakistan (SBP) figures, the foreign direct investment (FDI) in the country rose more than 69 percent to 2.1 billion dollars in the first seven months of current fiscal year (July-June), compared with 1.24 billion dollars in the corresponding period last year.
Inflows from foreign portfolio investment during the seven months were 697.4 million dollars, up from 400.5 million dollars in the last fiscal year.
WORLD MARKETS SCENARIO: The dollar tumbled most of the time in the globe as a result of the rising tensions over the Iran's nuclear programme, dealer said. On February 26, the single European currency hit a seven-week high against the US currency, extending gains as the dollar suffered from negative developments following tensions over Iran's nuclear programme.
The euro went up as high as 1.3192 dollars on EBS before easing back slightly to 1.3185 dollars, up 0.2 percent from late New York trade last week. The dollar slipped 0.2 percent against the Swiss franc to 1.2300 francs, near a seven-week low.
In the middle of the week, the dollar hit a two-month low against the euro and also weakened versus the yen on the back of tensions over Iran's nuclear plans. Expectations that the US Federal Reserve may cut rates this year also weighed on sentiment for the dollar, traders said.
The next day, the yen rose against the dollar and the euro, as stock market declines across Asia made investors edgy about a further slide in risky assets.
Falls in global stock markets, a rise in the price of oil, growing tensions over Iran's nuclear programme and a run of weaker-than-expected US data have all contributed to a sharp fall in risk appetite in recent sessions.
INTER-BANK MARKET RATES: On Monday, the rupee lost four paisa against the dollar, for buying and selling at 60.69 and 60.71, moneychangers said. Firmness prevailed in the interbank market on Tuesday as the rupee was unmoved against the dollar, for buying and selling at 60.69 and 60.71, dealers said.
Balanced demand for dollar and its supply did not allow the rupee to look any side, they said. But it is expected that the rupee may not retain its firmness as a result of the rising demand for the dollar by the corporate sector, they said. On Wednesday, the rupee was trading at 60 67 and 60.69 due to good supply of dollars, they said.
On Thursday, the rupee gave up its overnight firmness against the dollar as it dropped three paisa for buying at 60.70 and slid two paisa for selling at 60.71, dealers said.
On Friday, the rupee shed one paisa against the dollar for buying at 60.71 and selling at 60.72, dealers said.
OPEN MARKET RATES: On Monday, the rupee picked up three paisa against the dollar for buying and selling at 60.68 and 60.78, dealers said.
The euro moved with light gain of one paisa against the rupee for buying and selling at Rs 79.45 and Rs 79.55, dealers said. On Tuesday the rupee maintained the overnight levels against the dollar for buying and selling at 60.68 and 60.78, dealers said.
While the euro recovered more, gaining 10 paisa against the rupee for buying and selling at Rs 79.55 and Rs 79.65, dealers said.
On Wednesday, the rupee fell against the euro, shedding 10 paisa for buying and selling at 79.78 and 79.88, they said.
On Friday, the rupee improved further against the dollar as it picked up two paisa for buying at 60.65 and three paisa for selling at 60.75, dealers said.
The euro firmly held its firmness, gaining eight paisa more against the rupee for buying and selling at Rs 79.85 and Rs 79.90, dealers said.
On Saturday, the rupee shed two paisa against the dollar for buying at 60.67, it however, gained three paisa for selling at 60.72, they said.
The euro could not hold its command on firmness against the rupee, falling 16 paisa for buying and selling at Rs 79.68 and Rs 79.73, dealers said.