The rupee showed weakness versus the dollar in both the open and the inter-bank markets due to corporate demand for major payments.
In the inter-bank market, the rupee shed three paisa against the dollar for buying and selling at Rs 57.35 and Rs 57.37, respectively, while it lost 18 paisa versus the dollar in the open market for buying and selling at Rs 57.48 and Rs 57.58.
Versus the euro, the rupee shed 10 paisa for buying and selling at Rs 71.74 and Rs 72.02 respectively.
Commenting on the direction of business in the local market, currency analysts said the corporate demand pushed the rupee value down in the inter-bank market, as a result, it fluctuated moderately versus the greenback in the open market, too, as both the local and foreign banks covered their short-term position to meet the requirements.
There was also an anticipation that the dollar's firmness in the world markets, hurt the rupee's value slightly in the local market, they added.
Experts expecting the rupee may not fluctuate sharply versus the dollar in the near future due to several factors, said the rising trend in the foreign exchange reserves, and if the remittances lift from the present level, the rupee would maintain its firmness.
Last week, analysts said in the world markets, the dollar extended gains versus the single European currency as market players eyed the euro-US rate gap. Several investors indulged in fresh buying of the dollars due to growing expectations of the US economic recovery, they observed.
The greenback also took a lift from speculations that the European Central Bank (ECB) might intervene in the currency market or consider easing monetary policy.
Future trend of the global market will depend on next move by the ECB, and the Federal Reserve Bank meeting. So the market has curiosity to know the rate differential between the US and the euro zone.
To overcome the prevailing economic crisis followed by the dollar's fall, German Chancellor Gerhard Schroeder said he would discuss the dollar's prevailing trend against the euro during the meeting with US President George W. Bush this week, adding the current exchange rate was not satisfactory as the euro-zone concerned on single European currency's strength.
In the meantime, the International Monetary Fund (IMF) also said the Asian states must avoid the governments' intervention in the foreign exchange regime and introduce more flexibility in their currencies.
He was of the view that to help correct the global imbalances, the parity rate must be determined especially by market forces.
According to a report, under the circumstances, some Asian banks, including the Bank of Japan (BoJ) and the Singapore Bank agreed to continue interventions to save their own economies. The drifting position of the dollar is hurting export earnings, economists said.
INTERBANK RATES: On Monday, supportive buying of dollars forced the rupee to surrender its firmness, losing four paisa for buying and selling at Rs 57.32 and Rs 57.35, dealers said.
The rupee got strength on expanding demand for dollars by the local and foreign banks demand, market men said, adding the rupee might continue its weakness in the coming days as the dollar will sustain its firm posture amid persistent demand ahead of Ashura holidays.
On Tuesday, the rupee managed to recover three paisa in terms of the dollar for buying and selling at Rs 57.30 and Rs 57.32, respectively.
On Wednesday, it posted fresh gain of one paisa versus the dollar for buying and selling at Rs 57.29 and Rs 57.48 on balanced demand and supply of dollars, analysts said.
On Thursday, the rupee-dollar parity remained unchanged in the inter-bank market for the second day in a row at Rs 57.29 and Rs 57.31, respectively.
On Friday, corporate demand kept the rupee under pressure, shedding five paisa versus the dollar for buying and selling at Rs 57.34 and Rs 57.36, respectively.
The greenback demand is high as banks bought dollars to meet their immediate needs ahead of Ashura holidays, dealers said. On Saturday, it shed one paisa versus the dollar for buying and selling at Rs 57.35 and Rs 57.37, respectively.
KERB MARKET RATES: On February 23, the rupee maintained its week-long firmness in terms of the dollar for buying and selling at Rs 57.30 and Rs 57.35, respectively. Versus the euro, the rupee shed 15 paisa for buying and selling at Rs 71.83 and Rs 72.13, respectively.
On February 24, the gap between the inter-bank and the kerb rates widened as the rupee shed 10 paisa against the dollar for buying at Rs 57.40 and lost 15 paisa for selling at Rs 57.50.
The rupee also lost 25 paisa versus the euro for buying and selling at Rs 72.08 and Rs 72.38 on the slight increase in the single currency's value in the international markets. On February 25, the rupee depicted mixed trend versus the dollar for buying and selling at Rs 57.42 and Rs 57.48, respectively.
They, however, said the single European currency gradually heading for recovering its lost ground, picking up 60 paisa for buying and selling at Rs 72.67 and Rs 72.97, respectively.
On February 26, in terms of the euro, the rupee gained Rs 1.30 for buying and selling at Rs 71.37 and Rs 71.67 as the euro fell in the world market versus the dollar.
The rupee followed suit, and picked up two paisa versus the dollar for buying and selling at Rs 57.40 and Rs 57.50, respectively.
On February 27, it lost three paisa against the greenback for buying at Rs 57.43 while it maintained its selling rate at Rs 57.50.
The rupee, however, gained versus the euro for buying and selling at Rs 71.43 and Rs 71.46 on its declining demand in the international markets.
At the weekend, the rupee lost five paisa for buying at Rs 57.48 and eight paisa for selling at Rs 57.58, respectively. It also dropped 55 paisa versus the euro for buying and selling at Rs 71.74 and Rs 72.02, respectively.
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