The rupee moved down versus the dollar during the week, ended on January 31, 2009. It is likely that the rupee may face further decline in days to come. On the interbank market, the rupee fell 5 paisa in relation to the dollar for buying at 79.05 and it also shed five paisa for selling at 79.10.
The rupee showed sharp fall versus the dollar on the open market, falling 40 paisa for buying at 79.50 and it fell 30 paisa for selling at 79.80. The rupee, however, moved ahead with little gain of Re 1.50 paisa in terms of the euro for buying and selling at Rs 102.00 and Rs 104.00.
Importer rush for dollars, pushed the rupee down in relation to the greenback; in the meantime, slight improvement in supply of dollars boosted the rupee but it proved short-lived. The currency analysts were of the view that the rupee's gradual fall versus the dollar may start in the middle of February, 2009.
The rupee came under massive pressure following the SBP announcement that the oil payments should be made through the banks, instead of the central bank.
The payments of oil bills, which are still paid 100 percent by the SBP will come to an end on February 2, 2009. The State Bank of Pakistan (SBP), under an International Monetary Fund (IMF) pact had announced on January 15 that it would not pay import bills of furnace oil from February 2, 2009.
INTER-BANK RATES: On Monday, the rupee inched up versus the dollar, rising five paisa for buying at 78.95 while it did not show any change for selling at 79.05.
On Tuesday, the rupee appreciated by 10 paisa versus the dollar for buying at 78.85 and it also gained 15 paisa for selling at 78.90. On Wednesday, the rupee failed to retain its overnight level versus the dollar, losing 15 paisa for buying and selling at 79.00 and 79.05. On Thursday, the rupee gave up its overnight weakness against the dollar, rising five paisa for buying and selling at 78.95 and 79.00.
On Friday, the rupee was lower against the dollar, giving up five paisa for buying and selling at 79.00 and 79.05. At the week-end, the rupee moved down with five paisa slide against the dollar for buying and selling at 79.05 and 79.10.
WORLD VALUE OF DOLLAR: Amid first session of the week, dollar climbed, moving back near a 23-year high against sterling and a six-week high versus euro as fears about the global recession and banking sector problems pushed investors away from risk. Amid second session, the yen fell against the euro and sterling as Tokyo shares rose and after the Japanese government confirmed a capital injection scheme to help companies seriously hurt by the financial crisis.
During the third Asian trading, the dollar edged up against the yen as an improved appetite for risk prompted investors to dump the safe-haven Japanese currency, while the dollar dipped versus the euro. The Fed concluded a two-day policy meeting later in the day and could unveil new steps aimed at easing the credit crunch.
During the fourth Asian trading, the dollar dipped against the yen, after rising the previous day due to a rally in US shares and after the US Federal Reserve refrained from committing to purchase long-dated Treasuries.
The Fed kept interest rates near zero on Wednesday after a two-day policy meeting, although it said it was prepared to buy long-term Treasury debt if that would help improve credit conditions.
In the final session, the dollar rose against the euro on Friday as deepening concerns over the global recession prompted investors to shed risky assets and seek the harbour of the world's most liquid currency.
The yen climbed across the board as a drop in stock markets sparked unwinding of carry trades, in which investors use low-yielding currencies such as the yen to fund purchases of assets and currencies with higher yields elsewhere.
In the NY market, the dollar rose against the euro on Friday, on track for its best month since October, as evidence of a prolonged slump on both sides of the Atlantic added to the greenback's appeal as a safe haven for investors.
The euro shed more than 1 percent against the dollar and tumbled against the yen after euro-zone employment and inflation data underscored the spreading economic malaise.
OPEN MARKET RATES: On January 26, the rupee managed to gain 10 paisa against dollar for buying and selling at 79.10 and 79.50. The rupee also appreciated versus euro after gaining 80 paisa for buying and selling at Rs 102.20 and Rs 104.20.
On January 27, the rupee gained 10 paisa against the dollar for buying at 79.00 while it managed to retain its overnight level for selling at 79.50. The rupee, however, could not retain its overnight firmness in terms of the euro, losing 1.30 for buying and selling at Rs 103.50 and Rs 105.50.
On January 28, the rupee firmly held its overnight level against the dollar for buying at 79.00 while it managed to gain 20 paisa for selling at 79.30. The rupee continued its slide against the euro, falling 50 paisa for buying and selling at Rs 104.00 and Rs 106.00.
On January 29, the rupee for the second day held its overnight level against the dollar for buying at 79.00 and it also retained its value for selling at 79.30.
The rupee recovered against the euro, gaining Re. one for buying and selling at Rs 103.00 and Rs 105.00. On January 30, the rupee continued its down drift against the dollar, falling 10 paisa for buying at 70.10 and it also lost 20 paisa for selling at 79.50. The rupee failed to show its firmness against the euro, slipping 50 paisa for buying and selling at Rs 103.50 and Rs 105.50.
On January 31, the rupee extended its fall versus the dollar, slipping 40 paisa for buying at 79.50 and it also came down with a fall of 30 paisa for selling at 79.80. The rupee moved forward with an appreciation of Rs 1.50 against the euro for buying and selling at Rs 102.00 and Rs 104.00.