Easy trend was seen on currency market during the week ended on November 26, 2011 as the rupee came under pressure after dollar crossed the Rs 88 level due to higher forward buying the US currency. In interbank dealings, the rupee fell sharply against dollar, losing 71 paisa for buying at 87.75 and 72 paisa for selling at 87.80.
In the open market, the rupee lost 90 paisa versus dollar for buying at 87.85 and Re one for selling at Rs 88.05. The rupee, however, gained Rs 1.29 in relation to euro for buying and selling at Rs 116.03 and Rs 116.53.
It is expected that the rupee may lose further against dollar in the coming days due to bleak picture of world economy. The outlook for 2011-12 seems challenging for Pak authority, and so the government assured the International Monetary Fund (IMF) to strengthen macro-economic policies and continue to pursue reforms to enhance medium term growth prospects. The Pak authority and mission agreed that containing the budget deficit in 2011-12, a cautious monetary policy and a responsive exchange rate would reduce raise in living standards and employment. So, the rupee may continue its decline in the coming days and may hit new low at 95.
According to the State Bank of Pakistan (SBP), the country's foreign exchange reserves fell to 16.96 billion dollars in the week ending November 18, compared with 17.03 billion dollars in the previous week.
INTER-BANK MARKET RATES: On Monday, the rupee lost 21 paisa versus dollar for buying at 87.25 and 22 paisa for selling at 87.30.
On Tuesday, the rupee dropped 5 paisa in relation to dollar for buying at 87.30 and three paisa for selling at 87.33.
On Wednesday, the rupee dropped 20 paisa in relation to dollar for buying at 87.50 and 21 paisa for selling at 87.54.
On Thursday, the rupee dropped 15 paisa in relation to dollar for buying at 87.65 and 13 paisa for selling at 87.67.
On Friday, the rupee dropped 10 paisa in relation to dollar for buying at 87.75 and 13 paisa for selling at 87.80.
OVERSEAS MARKET OUTLOOK: In the first Asian trade, euro held steady after a short-squeeze rally late in previous week, with market players looking for more clarity on how Europe plans to stop the rapid erosion of confidence in its sovereign debt.
The euro was helped slightly by dollar coming under mild pressure with a US congressional "super committee" expected to formally announce on Monday the failure of its three-month-long effort to forge a $1.2 trillion deficit reduction plan.
Still, many players remained nervous of holding euro, unsure how policymakers can bring down the borrowing costs of many eurozone governments from current elevated levels. The euro drifted to $1.3513, down 0.1 percent from $1.3519 late in New York and well off Friday's peak of $1.3614.
The dollar was trading against Indian rupee at Rs 51.34, at 3.1680 versus Malaysian ringgit, and at 6.354 in terms of Chinese yuan. Inter bank buy/sell rates for taka against dollar on Monday were 76.60-76.61 (previous 76.55-76.58) and Call Money Rates 07.00/12.00 percent (previous 06.50-12.00 percent).
In the second Asian trade, dollar stuck near a six-week high against a basket of currencies on Tuesday on a sharp pullback in global risk appetite as the sovereign debt storm intensified on both sides of the Atlantic.
Severe dollar funding strains supported US currency as European banks scrambled to secure cash dollars, with dollar money market seizing up and investors fearing that a fall in euro zone government bond prices could pummel European banks.
Indian rupee fell to an all-time low on Tuesday as oil refiners and other companies scrambled to buy dollars, with the currency looking increasingly vulnerable to a swelling current account deficit and fears over the global economy and euro zone. The rupee skidded nearly 17 percent from a 2011 high reached in late July as risk-averse investors flew from the emerging markets, increasing the difficulties for a government already struggling with high. The rupee was at 52.45/46 per dollar after touching an all-time low of 52.73, and 0.6 percent weaker than its previous close of 52.1550/1650.
The yuan ended down slightly against dollar after the People's Bank of China set the mid-point marginally lower, but the Chinese currency is expected to stay relatively strong, bolstered by long-term policy objectives.
In the third Asian trade, euro slipped after a newspaper said that Belgium and France were in fresh talks over an existing rescue deal for Dexia, stirring worries about the potential for an increased fiscal burden on France.
Belgian newspaper De Standaard said that talks were taking place, citing no sources, although it also said that Belgium's finance minister Didier Reynders denied that the accord reached between the two states to rescue the bank would be dismantled.
The yuan closed up slightly against dollar on Wednesday after People's Bank of China set the mid-point moderately higher, possibly signalling that it wanted to set a near-term floor for yuan as it neared 6.36 per dollar, traders said. Inter bank buy/sell rates for taka against dollar were 76.66-76.70 (previous 76.62-76.65) and Call Money Rates: 07.00/08.00 percent (previous 06.50-08.00 percent).
The dollar was at Rs 51.84 versus the Indian rupee and it was trading at 3.1800 against the Malaysian ringgit.
In the fourth Asian trade, the euro stayed near seven-week lows against the dollar, having suffered a steep fall after a "disastrous" German bond sale fuelled fears the region's debt crisis was beginning to threaten even Europe's biggest economy.
Although the euro bounced back slightly in Asia on short-covering, bringing other risk currencies higher with it, market players see the currency staying under pressure as tensions in the currency bloc showed no sign of abating.
The dollar was trading versus Indian rupee at Rs 52.15, at 3.1850 against Malaysian ringgit, and at 6.3635 in terms of Chinese yuan.
During the final Asian trade, the euro dipped to a fresh seven-week low against dollar, struggling to find any traction with markets seeing no end in sight for the euro zone debt crisis.
The common currency had shed 1.5 percent in the week, having come under pressure after lacklustre demand at a German bond auction on Wednesday stirred fears the debt crisis was starting to threaten even Europe's biggest economy.
The euro hit a seven-week low of $1.3298 on Friday, and market players were bracing for further weakness in coming months, although short-covering may slow the currency's descent and cause some swings in between.down on strong month-end dollar demand.
The yuan ended down against dollar even though People's Bank of China set mid-point slightly higher, as dealers cited strong dollar demand around the month-end and the dollar index hit a two-month high. The dollar was available against Indian rupee at Rs 52.18 and versus Malaysian ringgit at 3.1905.
At the week-end euro fell to its lowest in more than seven weeks against dollar and was poised to weaken further after a disappointing Italian bond auction stoked fears the euro zone crisis was deepening.
Italy paid a record 6.5 percent to borrow money over six months on Friday and its longer-term funding costs soared far above levels that are seen as sustainable. The rise in borrowing costs came even as the European Central Bank bought bonds in the secondary market.
OPEN MARKET RATES: On November 21, the rupee shed 20 paisa against dollar for buying at 87.15 and 25 paisa for selling at 87.30. The rupee, however, inched up in terms of euro, gaining three paisa for buying and selling at Rs 117.29 and Rs 117.79.
On November 22, the rupee shed 15 paisa against dollar for buying at 87.30 and 20 paisa for selling at 87.50. The rupee lost 39 paisa in terms of euro for buying and selling at Rs 117.68 and Rs 118.18.
On November 23, the rupee fell by 10 paisa in relation to dollar for buying and selling at 87.40 and 87.60. The rupee, however, gained 32 paisa in terms of euro for buying and selling at Rs 117.36 and Rs 117.86.
On November 24, the rupee slipped 20 paisa against dollar for buying and selling at Rs at 87.60 and 87.80. The rupee lost 63 paisa versus euro for buying and selling at Rs 116.73 and Rs 117.23.
On November 25, the rupee slipped by five paisa against dollar for buying and selling at Rs at 87.65 and 87.85. The rupee, however, managed to recover versus euro 27 paisa for buying and selling at Rs 116.46 and Rs 116.96.
On November 26, the rupee lost 20 paisa against dollar for buying and selling at 87.85 and 88.05. The rupee, however, maintained its overnight bullish trend versus euro gaining 43 paisa for buying and selling at Rs 116.03 and Rs 116.53.