THE RUPEE: firm conditions despite importers' rush for dollars

Importers' rush for dollars to clear imports bills pushed the rupee down slightly in the open market during the week ended on June 24, 2007, dealers said. However, the rupee did not show any major change against dollar in interbank dealings at Rs 60.61 and Rs 60.63 for buying and selling.
In the open market, the rupee loss was marginal in relation to dollar at 61.05 and 61.12 for buying and selling, dealers said. But, it came under pressure against euro, and lost 40 paisa at Rs 82.01 and Rs 82.11 for buying and selling, respectively, they added.
The rupee fell in the open market as the bankers increased their dollar buying to meet their requirements, money experts said. In the meantime, the days are not far when the rupee will see revaluation against dollar as the neighbouring countries currencies were on upward trend versus dollar, they added.
Indications were that Pak rupee might start coming up as, for nearly one year, the Chinese yuan and Indian rupee are appreciating, and this is not creating many worries for exporters in these regions, they said.
It is due to very courageousness and bold steps taken by these countries and would definitely give more boost to their economies, they commented. However, a clear-cut picture would emerge after all payments were done. Then the rupee would start its journey to seek real direction against dollar, they added.
INTER-BANK MARET RATES: On Monday, the rupee shed three paisa against dollar for buying and selling at 60.62 and 60.64, dealers said. On Tuesday, the rupee managed to recover its gains against dollar, picking two paisa for buying and selling at 60.60 and 60.62, dealers said.
On Wednesday, the rupee, inched up with slight gains, picking one paisa for buying at 60.59 and gaining two paisa for selling at 60.60, they said.
On Thursday, the rupee three paia against dollar for buying at 60.62 and shedding four paisa for selling at 60.64, they said.
On Friday, the rupee shed five paisa against dollar for buying and selling at 60.67 and 60.69, dealers said.
At the weekend, the rupee maintained a firm outlook as it gained one paisa against dollar for buying and selling at 60.61 and 60.63, dealers said.
WORLD VALUE OF DOLLAR: In the first session of the week, the euro extended its gains to hit a record high against the low-yielding yen for the second straight session, getting a boost following Friday's remarks by BoJ Governor Toshihiko Fukui that all but doused fears of a rate rise in July.
In the second session, the single European currency made handsome gains as the yen hit a record low versus the euro and held near a 4-1/2-year trough against the dollar, pressured by the view that Japanese interest rate rises will be outpaced by those of other central banks.
The dollar remained weak against the euro and sterling on a slide in US government bond yields, which retreated after touching five-year highs last week. The yen fell across the board since Bank of Japan Governor Toshihiko Fukui said last week he had no preconceived ideas about a future rate rise, dousing expectations of a hike in July.
In the third session, the yen hovered near an all-time low against the euro and a 4-1/2-year low versus the dollar as investors felt confident putting on carry trades to take advantage of the low-yielding Japanese currency.
In the middle of the week, the dollar moved both ways. Signs of a robust global economy, buoyant stock markets and renewed calm after a sell-off in major bond markets have prompted investors to borrow funds in currencies such as the yen to fund purchases of higher-yielding currencies such as the Australian and New Zealand dollars.
The yen took another dip in Asian trade Friday on continued expectations that Japan is in no rush to raise its super-low interest rates, dealers said.
They said stronger-than-expected US economic data in turn gave the dollar a further boost.
The dollar struck 123.94 yen in morning trade, the US unit's highest level since December 2002 and compared with 123.70 yen late Thursday in New York. In the closing session in the Asia, the yen hovered near a 4-1/2-year low versus the dollar on Thursday, hurt by more signs that it will remain a low-yielding funding currency for investors purchasing higher-yielding currencies in carry trades.
The yen drifted away from a record peak against the euro but traders said it was just a matter of time before the single currency scaled a new high against the Japanese currency.
At the closing session, the Swiss franc rose to a 16-year high against the yen at the week-end, as the franc broadly rallied on expectations the Swiss National Bank may quicken its pace of interest rate increases. The franc rose more than one percent from late Thursday to 100.83, the highest since March 1991, according to Reuters data.
The dollar has fallen 0.9 percent to 1.2294 francs, on track for the largest daily decline since late February.
OPEN MARKET RATES: On June 18, the rupee showed no change against dollar at 61.00 and 61.10 due to persistent demand for US currency, dealers said.
The rupee lost nine paisa against euro for buying and selling at Rs 81.54 and Rs 81.59 in process of trading, they said.
On June 19, the rupee lost eight paisa against dollar for buying and selling at 61.08 and 60.18, dealers said. The rupee fell 21 paisa against euro for buying and selling at Rs 81.75 and Rs 81.85, they said.
On June 20, the rupee lost 10 paisa against dollar for buying at 61.18 and shedding seven paisa for selling at 61.25, dealers said. The rupee also 10 paisa against euro for buying and selling at Rs 81.85 and Rs 81.95, they said.
On June 21, the rupee gained eight paisa against dollar for buying and selling at 61.10 and 61.20, dealers said. The rupee was trading at Rs 81.66 and Rs 81.76 against euro, they said.
On June 22, the rupee gained five paisa against dollar for buying at 61.05 and 60.12, it, and six paisa versus euro for buying and selling at Rs 81.60 and Rs 81.70, dealers said.
On June 23, the rupee maintained its overnight level against dollar for buying at 61.05 and gained eight paisa for selling at 61.12, they said.
The rupee, however, lost 36 paisa against euro for buying at Rs 82.01 and Rs 82.11, they added.