THE RUPEE: modest gains


The rupee managed to hold it’s firmness versus the dollar on the currency market during the week, ended on May 17, 2014. In the interbank market, the rupee posted fresh gains of 30 paisa in terms of the dollar for buying and selling at 98.52 and Rs 98.54.

In the open market, the rupee depicted steadier trend, holding last levels at Rs 99.20 and Rs 99.40. The rupee followed same pattern in terms of the euro, showing no change for buying and selling at Rs 136.00 and Rs 136.25.

Explaining the stability of the rupee in relation to the dollar, economists were of the view that it is because of smooth supply of the US currency.

Some other analysts said that next month the government will complete it’s first financial year with high profile such as improvement in country’s foreign exchange reserves, appreciation in the rupee versus dollar keeping the inflation in single figure. The ground realities, however, depicting a different situation as no significant rise was seen in the Foreign Direct Investment (FDI), besides, a modest fall was also witnessed in exports of textile products despite the Generalised System of Preference (GSP) plus by the European Union (EU).

Sources close to the textile industry attributed the fall to non-availability of power in a proper way to the industry, particularly in Punjab.

The rupee, in the near-term, will move in a narrow range versus the dollar in the coming days, they said.

INTER-BANK MARKET RATES: On Monday, the rupee lost 23 paisa in relation to the dollar for buying and selling at Rs 98.80 and Rs 98.83. On Tuesday, the rupee inched by three paisa versus the greenback for buying at Rs 98.78 and it also moved with little gain of one paisa for selling at Rs 98.82. On Wednesday, the rupee rose by 15 paisa in relation to the dollar for buying at 98.63 and it also picked up 15 paisa for selling at Rs 98.65. On Thursday, the rupee shed one-paisa in relation to the dollar for buying and selling at Rs 98.64 and Rs 98.66 respectively. On Friday, the rupee gained 12 paisa versus the dollar for buying and selling at 98.52 and Rs 98.54.

OPEN MARKET RATES: On May 12, the rupee followed same trend in terms of the dollar, losing 10 paisa for buying at Rs 99.20 and it also shed five paisa for selling at Rs 99.40.

While, the national currency retained week-end levels against the euro for buying and selling at Rs 136.00 and Rs 136.25, they said.

On May 13, the rupee, however, lost 10 paisa in relation to the dollar for buying at Rs 99.30 and the national currency also shed five paisa for selling at Rs 99.45. The national currency failed to sustain its levels against the euro, dropping 75 paisa for buying and selling at Rs 136.75 and Rs 137.00.

On May 14, the rupee appreciated by five paisa against the dollar for buying and selling at Rs 99.25 and Rs 99.40. The national currency also gained Re.one in terms of the euro, for buying and selling at Rs 135.75 and Rs 136.00. On May 15, the rupee managed to hold the rising trend against the dollar, picking up 10 paisa for buying at Rs 99.15 and five paisa for selling at Rs 99.35, dealers said. It also gained Rs 75 in terms of the euro for buying and selling at Rs 135.00 and Rs 135.25.

On May 16, the rupee firmly held the overnight levels against the dollar for buying and selling at Rs 99.15 and Rs 99.35. The rupee recovered 25 in terms of the euro for buying and selling at Rs 135.25 and Rs 135.50.

On May, 17 the rupee shed five paisa versus the dollar for buying and selling at Rs 99.20 and Rs 99.40. The rupee also lost 75 in terms of the euro for buying and selling at Rs 136.00 and Rs 136.25.

OVERSEAS OUTLOOK FOR DOLLAR: In the first Asian trade, the euro started the week on a steadier footing after two straight sessions of steep losses, but should stay under pressure amid the persistent threat of policy action from the European Central Bank. The common currency, which plumbed a one-month trough of $1.3745 on Friday, last held steady on the day at $1.3754. The dollar was trading against the Indian rupee at Rs 59.68, the greenback was at 3.2330 in terms of the Malaysian ringgit and the US currency was at 6.2333 versus the Chinese yuan.

Inter bank buy/sell rates for the taka against the dollar on Monday. 77.6450-77.6500 (77.6500-77.6500). Call Money Rates: 05.50-07.25 percent (previous 05.50-07.25 percent).

In the second Asian trade, the euro stabilised near one-month lows against the dollar, although it remains under pressure as investors expect the European Central Bank to try to limit its longer-term strength in a bid to boost the euro-zone economy.

The euro fetched $1.3755, near its one-month low of $1.3745 hit on Friday, having fallen 1.2 percent since ECB chief Mario Draghi said the bank was ready to take action next month to lift economic growth.

The dollar was trading against the Indian rupee at Rs 59.85, the greenback was at 3.2370 in terms of the Malaysian ringgit and the US currency was at 6.2309 versus the Chinese yuan.

In the third Asian trade, the euro languished near five-week lows against the dollar, having come under renewed pressure as markets grow more convinced the European Central Bank (ECB) will ease policy next month. The euro inched up 0.1 percent to about $1.3715, staying within sight of Tuesday’s low near $1.3688. A break below the April 4 trough of $1.3672 would take it back to levels not seen since late February.

The dollar was at Rs 59.68 versus the Indian rupee, the greenback was available at 3.2230 against the Malaysian ringgit and the US currency was trading in relation to the Chinese yuan at 6.2275.

Inter bank buy/sell rates for the taka against the dollar on Wednesday. 77.6425-77.6500 (77.6450-77.6500). Call Money Rates: 05.50-07.25 percent (previous 05.50-07.25 percent).

In the fourth Asian trade, the Indian rupee and South Korean won rose, when most Southeast Asian currencies eased on profit-taking, but the gains were pared as foreign exchange authorities in the two countries were seen intervening.

The rupee advanced as much as 0.4 percent to 59.45, its strongest since July, one day before results for India’s election was due.

The dollar was trading against the Indian rupee at Rs 59.32, the US currency was at 3.2215 in terms of the Malaysian ringgit and the greenback was at 6.228 versus the Chinese yuan.

Inter bank buy/sell rates for the taka against the dollar on Thursday: 77.64-77.65 (77.6425-77.6500). Call Money Rates: 05.50-07.25 percent (previous 05.50-07.25 percent).

In the final Asian trade, the euro was back in familiar territory against the dollar, having staged a rebound from a 2-1/2-month trough as investors booked profits on bearish positions ahead of the weekend.

The common currency rose 0.1 percent to $1.3718. It had fallen as far as $1.3648 on Thursday, its lowest level since late February, in response to data showing the euro zone grew much less than expected at the start of the year.

The dollar was trading against the Indian rupee at Rs 58.70, the greenback was at 3.2305 versus the Malaysian ringgit and the US currency was available at 6.2316 in relation to the Chinese yuan.

At the week-end, the dollar held steady against major currencies on Friday as selling of the currency faded with benchmark U.S. yields stabilising at their lowest levels in six months, although the greenback faces further weakness if yields resume their decline.

The dollar pared earlier losses against the yen and euro after a stronger-than-expected report on U.S. housing construction but is still on track for its biggest weekly losses since early April.

Recorder Report

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