Smooth supply of dollars made the rupee able to resist sharp declines during the week ended on April 25, 2009. On the interbank market, the rupee inched up with three paisa against dollar for buying at 80.52 and five paisa for selling at 80.55.
However, on the open market it shed 10 paisa versus the US currency for buying at 80.60 but for selling it was unchanged at 80.70, while it slid versus euro sharply to Rs 106.25 and Rs 107.25 for buying and selling.
The feature of the week was an important decision by the State Bank of Pakistan (SBP) in which it cut its discount rate to bring the moribund economy on track. On Monday, SBP Governor Salim Raza announced to cut its discount rate, the key policy rate, by 100 basis points to 14 percent for the rest of the fiscal year ending on June 30 2009. Regarding the rate cut, there were some mixed reactions. According to the State Bank of Pakistan (SBP), foreign exchange reserves stood at 11.079 billion dollars.
INTER-BANK MARKET RATES: On Monday, the rupee lost 21 paisa against dollar for buying at 80.55 and 23 paisa for selling at 80.60. On Tuesday, the rupee shedding 5 paisa in relation to dollar for buying at 80.60 and 3 paisa for selling at 80.63. On Wednesday, the rupee depicted one paisa gain versus dollar for buying at 80.59 and two paisa for selling at 80.61.
On Thursday, the rupee posted a gain of four paisa versus dollar for buying at 80.55 and one paisa at 80.60. On Friday, the rupee shed seven paisa in relation to dollar for buying and selling at 80.48 and 80.53. On Saturday, the rupee slid four paisa against dollar for buying at 80.52 and two paisa for selling at 80.55.
OVERSEAS PERFORMANCE OF DOLLAR VS MAJOR CURRENCIES: On first day of the week in Asia, the euro hit a one-month low against dollar and a three-week trough versus yen due to uncertainty over policy steps the European Central Bank (ECB) might take.
In the second Asian session, the yen slipped from a one-month high against euro, as short-term investors pocketed profits, and retreated from the steepest of its gains against other majors made on renewed concerns about banks. In the third Asian trading, the yen rose across the board on Wednesday as a rebound in the euro and commodity currencies faded, with the market on watch for clues about the health of the banking system as a key to longer-term direction.
In the fourth Asian trading, the yen gave up early gains and slipped broadly as US stock futures and Tokyo share prices turned positive, spurring buybacks of higher-yielding currencies against the yen. The yen rose broadly earlier in the day as concerns about the banking sector re-emerged in the wake of disappointing earnings from Morgan Stanley on Wednesday.
The yen hit its highest level in about four weeks against dollar on Friday, driven by the unwinding of money-losing positions, as the market awaited developments on US banks' stress tests. The yen gained broadly, with the Australian dollar falling 1.2 percent and sterling dropping 1.4 percent against the Japanese currency.
In the New York market, the euro rose against dollar for a fourth straight session as improved business sentiment in Germany added to hopes that the euro-zone economy may already have seen the worst of the recession.
Dollar demand also faded as a stock rally lifted investor risk appetite, though analysts said worries that US automaker Chrysler may be nearing bankruptcy also hit the greenback.
OPEN MARKET RATES: On April 20, the rupee was up 10 paisa versus dollar for buying at 80.50 while it did not show any change for selling at 80.70. The rupee, however, shed 30 paisa in terms of euro for buying and selling at Rs 104.30 and Rs 105.30. On April 21, the rupee lost 5 paisa for buying at 80.55 versus the US currency while it gained the same amount for selling at 80.65. The rupee recovered 70 paisa against euro for buying and selling at Rs 103.60 and Rs 104.60.
On April 22, the rupee lost 5 paisa against dollar for buying and selling at 80.60 and at 80.70. The rupee shed 10 paisa versus euro for buying and selling at Rs 103.70 and Rs 104.70.
On April 23, the rupee was higher by five paisa versus dollar for buying and selling at 80.55 and at 80.65. The rupee, however, lost 45 paisa in relation to euro for buying and selling at Rs 104.15 and Rs 105.15.
On April 24, the rupee lost 15 paisa for buying and selling at 80.70 and 80.80. The rupee adopted the same pattern in terms of euro, falling sharply by Rs 1.15 at Rs 105.30 and Rs 106.30. On April 25, the rupee recovered 10 paisa against dollar for buying and selling at 80.60 and 80.70. The rupee lost 95 paisa versus euro for buying and selling at Rs 106.25 and Rs 107.25.