The rupee was slightly down versus dollar on the currency market during the week ended on February 4, 2012. In the interbank market, the rupee dropped five paisa against dollar for buying at 90.40 and five paisa for selling at 90.45.
In the open market, the rupee lost 15 paisa versus dollar for buying and selling at 90.40 and 90.60, and it also depreciated in relation to euro by 60 paisa for buying and selling at Rs 118.60 and Rs 119.60.
Commenting on the modest decline in the value of rupee, analysts said that he current issues, mainly the Supreme Court's decision to indict prime minister over his refusal to ask Switzerland to reopen graft cases against president Asif Zardari and big payments to the International Monetary Fund (IMF) in March were main factors behind the rupee's recent fall. So, leading importers were confused because of unfavourable political and economic condition. As a whole, the world major economies were facing recession and this factor was also reason behind the local currency's decline versus dollar. Prevailing uncertainties were causing lack of trust among them. Local buyers were busy in forward buying of dollars. On the other hand, foreign investors also kept on the sidelines to observe the situation. The positive factor was European Union (EU) package to boost textile exports as the government has appreciate the EU for securing a waiver on trade packaged from the World Trade Organisation (WTO), allowing duty-free import of 75 products from Pakistan to the 27-member European bloc, which will definitely help in the rupee to resist sharp fall versus dollar. Looking from another angle, the 6-month forward cover rate was Rs 94.49.
In the meantime, the rupee may recover if dollar supply improves as the government hinted that Nato supplies may be restored in days to come. It is a perception that restoration of supply could resume the Coalition sSpport Fund (CSF) for the country that would help to improve the foreign exchange regime. If trade deficit maintains its present trend, the rupee may experience more tough time.
According to the State Bank of Pakistan (SBP), the country's foreign exchange reserves rose marginally to 16.87 billion dollars in the week ending on January 27, boosted by an increase in commercial bank reserves, from 16.80 billion dollars in the previous week.
On Wednesday, the rupee shed one paisa in relation to dollar for buying 90.42 but retained its level for selling at 90.44. On Thursday, the rupee gained four paisa against dollar for buying and selling at 90.38 and 90.40. On Friday, the rupee shed two paisa in relation to dollar for buying 90.40 and five paisa for selling at 90.45.
On January 31, the rupee shed five paisa in relation to dollar for buying and selling at 90.30 and 90.50. The rupee also shed 36 paisa against euro for buying at Rs 118.36, but gained 14 paisa for selling at Rs 118.86. On February 1, the rupee lost five paisa versus dollar for buying and selling at 90.35 and 90.55. The rupee appreciated by 36 paisa against euro for buying at Rs 118.00 while it shed 14 paisa for selling at Rs 119.00.
On February 2, the rupee retained the overnight levels in terms of dollar for buying and selling at 90.35 and 90.55, while it shed 40 paisa in relation to euro for buying and selling at Rs 118.40 and Rs 119.40. On February 3, the rupee inched down five paisa in relation to dollar for buying and selling at 90.40 and 90.60. The rupee also depreciated by 20 paisa against euro for buying at Rs 118.60 and 14 paisa for selling at Rs 119.60.
Australian dollar soured the mood more, moving further away from three-month peaks hit in the wake of the Fed's pledge to keep interest rates low, after ratings agency Fitch put major Australian banks on a negative ratings watch. The dollar against Indian rupee was available at 49.51, versus Malaysian Ringgit at 3.0460, and was at 6.3213 in relation to Chinese yuan.
In the second Asian trade, euro rose, supported by hopes for a Greek debt restructuring deal that would help the country avoid a disorderly default, possibly setting itself up for a test of a key chart level. The dollar extended its recent losses versus yen and hit a three-month low, remaining under pressure after the US Federal Reserve said last week that it was likely to keep interest rates near zero at least until late 2014.
Interbank buy/sell rates for taka against dollar on Tuesday were 84.39-84.45 (previous 84.40-84.48) and Call Money Rates 10.00-20.00 percent (previous 09.00-20.00 percent). The dollar was trading versus Indian rupee at Rs 49.51, at 3.0490 versus Malaysian ringgit, at 6.312 per Chinese yuan.
In the third Asian trade, dollar hovered at three-month lows against yen on Wednesday and looked poised to lose ground for a fifth straight day, pressured by the Federal Reserve's pledge last week that it would keep interest rates near zero at least until late 2014.
The US Federal Reserve's decision triggered broad selling in the greenback and battered yields on US Treasury notes, with the yield on the five-year note barely above levels not seen since at least the 1960s. Interbank buy/sell rates for taka against dollar were 84.30-84.43 (previous 84.39-84.45) and Call Money Rates 20.00 percent (previous 10.00-20.00 percent).
In the fourth Asian trade, euro inched higher versus dollar and Australian dollar hit a five-month high on Thursday as risk sentiment improved after global manufacturing data allayed the market's worst fears about global growth. Underscoring its broad retreat, dollar hovered near a three-month low, hit against yen touched the previous day, and also fell against emerging Asian currencies such as Singapore dollar.
Interbank buy/sell rates for taka against dollar were 84.28-84.40 (previous 84.30-84.43) and Call Money Rates: 20.00 percent (previous 14.00-20.00 percent. The dollar was available versus Indian rupee at Rs 49.06, in terms of Malaysian ringgit at 3.0170, and versus Chinese yuan at 6.298.
In the final Asian trade, euro and Australian dollar struggled to make much headway in Asia on Friday as a dip in Chinese non-manufacturing data weighed on sentiment ahead of a key jobs report in the United States. The dollar was trading versus Indian rupee at Rs 48.92, in terms of Malaysian ringgit at 3.0145, and at 6.304 against Chinese yuan.
At the week-end, robust US jobs data spurred investors to buy US dollar and sell yen with the rosier economic report curtailing some expectations that the US Federal Reserve would hold off raising interest rates until 2014, Reuters added.
According to dealers, the dollar resumed trading at overnight Rs 90.50 and Rs 90.70 as buying and selling rates, respectively. At the end of trading, it closed at Rs 90.40 on buying side while its selling rate remained intact at Rs 90.70.
Pound sterling was bought and sold at Rs 142.30 and Rs 143.30, respectively, against Thursday's Rs 142.40 and Rs 142.90, dealers said.
The dollar opened at Rs 90 (buying) and Rs 90.20 (selling) against same last rate. It did not observe further change in the second session and closed at Rs 90 (buying) and Rs 90.20 (selling). Pound Sterling opened at Rs 142 (buying) and Rs 142.50 (selling) against same overnight value. It did not observe further change in the evening session and closed at Rs 142 (buying) and Rs 142.50 (selling).