Despite higher demand for dollars, the rupee managed to resist sharp fall versus the US currency during the week ended on March 20, 2010. On the interbank market, the rupee rose by five paisa in terms of dollar for buying and selling at 84.35 and 84.40.
On the open market, the rupee lost 15 paisa for buying at 84.45 and 10 paisa for selling at 84.45. However, it posted a gain of Rs 1.15 against euro for buying and selling at Rs 114.00 and Rs 114.50.
The rupee showed its firmness due to the strict watch by the State Bank of Pakistan (SBP) over supply of dollars, because there was strong buying by importers to clear payment.
In the meantime, fresh developments on the economic front are giving the impression that the country's economy may come out of the woods and may help the rupee in trimming the losses in the future, as there has been healthy trend in foreign exchange reserves, fall in current account deficit, and rise in cotton yarn exports.
The weekly data by the SBP depicted that the country's foreign exchange reserves had risen from bottom to 14.85 billion dollars,
INTER-BANK MARKET: On Monday, the rupee was unmoved in terms of dollar for buying and selling at 84.40 and 84.45.
On Tuesday, the rupee inched up two paisa versus dollar for buying and selling at 84.38 and 84.43. On Wednesday, the rupee appreciated by 13 paisa against dollar for buying and selling at 84.25 and 84.30.
On Thursday, the rupee shed three paisa against dollar for buying and selling at 84.28 and two paisa for selling at 84.32.
On Friday, the rupee rose by 11 paisa versus dollar for buying at 84.17 and 10 paisa for selling at 84.22. At the weekend, the rupee was sharply down by 18 paisa against dollar for buying and selling at 84.35 and 84.40.
OVERSEAS MARKET OUTLOOK FOR DOLLARS: In the beginning session of Asia, the dollar rose broadly as a drop in Asian stocks prompted some investors to shy away from riskier assets such as the euro and sterling which have been hit by sovereign debt concerns.
The yen was also on the defensive against the dollar, hovering within striking distance of a three-week low, on growing expectations that the Bank of Japan may consider loosening monetary policy further this week.
In the second session, the yen inched up as investors locked in profits against the euro due to a lack of progress on a financial aid package for debt-laden Greece, while the dollar held its gains ahead of a Federal Reserve policy-setting meeting.
Investors avoided taking risks after US Senate Banking Committee Chairman Christopher Dodd unveiled a revised financial reform bill on Monday, although the measure did not contain negative surprises.
In the third session, the yen slipped, reversing direction after players disappointed by only a modest easing step by the Bank of Japan tried to drive it higher and ran into a wall of selling. After pressure from the government for action to beat deflation, the BOJ decided in a 5-2 vote to double the size of a fixed rate fund supply tool adopted in December to 20 trillion yen ($222 billion) but kept the loan duration at three months, instead of six months as some expected.
In the fourth session, the euro tumbled broadly after a newswire report saying that Greece is not hopeful of receiving aid from other euro zone members.
A Greek official quoted in the report said the country was growing increasingly pessimistic about the prospect of help at a European Union summit on March 25 and may seek International Monetary Fund (IMF) aid during the April 2-4 Easter weekend.
Greece has said it was counting on EU leaders to approve an aid mechanism for the country at the meeting next week as it battles to deal with crippling debts. But some countries - especially Germany, the EU's biggest paymaster - are wary of making any concrete promises, and market participants said the Dow Jones Newsires report suggested a rift between Greece and Germany may be deepening.
In the final of Asian trade, the euro stabilised but remained under pressure after Greece said it could not achieve promised deficit cuts if its borrowing costs remain so high.
The euro had fallen broadly the previous day on worries over Greece's debt problems after a media report said the country was not optimistic about aid from euro zone members and could call in the International Monetary Fund if European leaders do not agree on a rescue plan next week. But Greece said aid from the global lender was a last resort. At the week-end, in New York, the euro fell over doubts Greece would win euro-zone aid, capping its worst week since January, and concerns about the UK economy hit sterling.
A report on Thursday that Greece saw limited prospects for euro-zone assistance raised concerns about the country's ability to service its debt. On Friday, the euro fell as far as $1.3502, its lowest level in more than two weeks. It was down 1.7 percent this week, its worst showing since late January.
OPEN MARKET RATES: On March 15, the rupee shed 10 paisa against dollar for buying and selling at 84.40 and 84.60. However, the rupee lost 25 paisa against euro for buying and selling at Rs 115.40 and Rs 115.90.
On March 16, the rupee shed five paisa against dollar for buying at 84.45 while it did not change for selling at 84.60. The rupee lost Rs 1.55 versus euro for buying and selling at Rs 116.95 and 117.45.
On March 17, the rupee drifted lower by five paisa against dollar for buying at 84.50 while it did not show any change for selling at 84.60. The rupee managed to gain 90 paisa in relation to euro for buying and selling at Rs 116.05 and Rs 116.55. On March 18, the rupee was unmoved against dollar for buying at 84.50 while it shed five paisa for selling at 84.65. The rupee picked up Rs 1.05 versus euro for buying at Rs 115.00 and selling at Rs 115.50.
On March 19, the rupee gained 20 paisa for buying at Rs 84.30 and 15 paisa for selling at 84.50. The rupee picked up 80 paisa versus euro for buying and selling at Rs 114.20 and Rs 114.70. On March 20, the rupee drifted lower in relation to dollar by 15 paisa for buying at 84.45 and 10 paisa for selling at 84.60. The rupee, however, gained 20 paisa for buying and selling at Rs 114.00 and Rs 114.50.