THE RUPEE: two-way trade


The rupee moved both ways against the dollar on the local currency market during the week, ended on May 31, 2014. In the interbank market, ahead of the budged 2014-15, the rupee gained 15 paisa in terms of the dollar for buying at Rs 98.68 and it also picked up by 16 paisa for selling at Rs 98.70.

In the open market, the rupee, however, lost 15 paisa versus the dollar for buying and selling at Rs 99.70 and 99.90. The rupee also dropped in relation to the euro, shedding 50 paisa for buying and selling at Rs 136.00 and Rs 136.25.

It was observed that the rupee managed to resist sharp decline versus the dollar despite higher demand by the people, who were purchasing dollars to visit the overseas. Parents preferred to spend summer holidays in the foreign countries due to law and order situation in their own homeland. At a time, as a result of high demand by public, dollar went up and crossed Rs 100, in the meantime, the rupee recovered lost ground, experts said.

In the long-term it is necessary to control the price of dollar as some currency viewers were of the view that some negative factors such as structural issues as energy shortage, very low tax collection as ratio of GDP, crumbling industrial and agriculture infrastructure, etc dragging down growth and private investment remain in place. Foreign Direct Investment (FDI) haS also plunged to 12 percent, besides, slight rise in exports, rising cost of doing business and sharp appreciation in exchange rate. Nobody can expect that the economy to improve fast, without resolving these issues.

Instead of starting such large infrastructure projects just invest in power generation and in construction of industrial and agriculture infrastructure to give a boost to the growth, which will create jobs and bring relief to the people.

Further, the inordinate delay in the formulation of policies and setting targets for different sectors of economy is quite upsetting. No improvement was seen in the foreign investment due to lack basic facilities, particularly, law and order situation. How can you invest in a particular industry without knowing the government’s plans about the industry? The long-awaited economic recover seems to have gained some steam in the first year of Nawaz government, the key indicators are showing sign of improvement and the chances are that government won’t miss most targets, it had set its first budget. In the meantime, economists were of the view that the economy has done well compared with the last fiscal year.

INTER-BANK MARKET RATE: On Monday, the rupee moved up by one paisa versus the dollar for buying at Rs 98.83 while it showed no change for selling at Rs 98.86. On Tuesday, the rupee gained one paisa versus the dollar for buying at Rs 98.82 while it picked up two paisa for selling at Rs 98.84, they said. On Wednesday, the rupee picked up six paisa versus the dollar for buying and selling at Rs 98.78 and Rs 98.84.

On Thursday, the rupee rose by 10-paisa in terms of the dollar for buying and selling at Rs 98.68 and Rs 98.70. On Friday, the rupee firmly held the overnight levels against the dollar for buying and selling at Rs 98.68 and Rs 98.70.

OPEN MARKET RATES: On May 26, the rupee rose against the dollar, gaining 10 paisa for buying at 99.55 and it also recovered five paisa for selling and Rs 99.75. While, the rupee appreciated by 25 paisa in terms of the euro for buying and selling at Rs 135.50 and Rs 135.75.

On May 27, the rupee, however, shed five paisa against the dollar for buying at 99.60 and it also depreciated by 10 paisa for selling and Rs 99.85, dealers said. While, the rupee gave up overnight firmness in relation to the euro for buying and selling at Rs 135.80 and Rs 136.05, they said.

On May 28, the rupee, however, lost 15 paisa in terms of the dollar for buying at Rs 99.75 and it shed five paisa for selling at Rs 99.90. While, the rupee recovered 30 paisa in relation to the euro for buying and selling at Rs 135.50 and Rs 135.75.

On May 29, the rupee also picked up 10-paisa versus the dollar for buying at Rs 99.65 and it also gained five-paisa for selling at Rs 99.85. The rupee, however, lost 25=paisa in relation to the euro for buying and selling at Rs 135.75 and Rs 136.00.

On May 30, the rupee inched down by five paisa versus the dollar for buying and selling at Rs 99.70 and Rs 99.90. The rupee adopted the same mood in terms of the euro as it also shed the same amount for buying and selling at Rs 135.80 and Rs 136.05.

On May 31, the rupee sustained overnight levels versus the dollar for buying and selling at Rs 99.70 and Rs 99.90. While, the rupee slipped in terms of the euro, losing 20 paisa for buying and selling at Rs 136.00 and Rs 136.25.

OVERSEAS OUT LOOK FOR DOLLAR: In the first Asian trade, the euro touched a fresh three-month low against the dollar as investors awaited comments from European Central Bank chief Mario Draghi and digested weekend elections in which critics of the European Union more than doubled their presence.

Liquidity was likely to be thin during the rest of the global session, with UK markets shut for the Spring bank holiday and US markets closed for Memorial Day.

The dollar was available at Rs 58.52 versus the Indian rupee, the greenback was at 3.2090 at in terms of the Malaysian ringgit and the US currency was at 6.237 versus the Chinese yuan.

Inter bank buy/sell rates for the taka against the dollar on Monday. 77.63-77.63 (77.63-77.63). Call Money Rates: 05.75-07.25 percent (previous 05.75-07.25 percent).

In the second Asian trade, the euro bounced back from a three-month low against the dollar, but the uptick failed to relieve persistent pressure from expectations of monetary easing by the European Central Bank next week. The common currency climbed to $1.3656, from Monday’s three-month low of $1.3615. Against the yen, it traded at 139.24, off a low of 138.73. Just last week, the euro hit a three-month trough of 138.1.

The dollar was trading against the Indian rupee at Rs 58.98, the US currency was at 3.2125 in terms of the Malaysian ringgit and the greenback was at 6.2420 versus the Chinese yuan. Inter bank buy/sell rates for the taka against the dollar on Tuesday. 77.63-77.6325 (77.63-77.63). Call Money Rates: 05.75-07.25 percent (previous 05.75-07.25 percent).

In the third Asian trade, the dollar held steady near an eight-week peak against a basket of major currencies, having edged up on the back of encouraging US economic data. The dollar index last stood at 80.340, staying near a high of 80.470 set on Tuesday, its highest level since early April.

The dollar was trading against the Indian rupee at Rs at 59.14, the greenback was at 3.2195 in terms of the Malaysian ringgit and the US currency was at 6.2586 versus the Chinese yuan. Inter bank buy/sell rates for the taka against the dollar on Wednesday. 77.63-77.6325 (77.63-77.6325). Call Money Rates: 05.60-07.25 percent (previous 05.60-07.25 percent).

In the fourth Asian trade, the dollar hovered near a two-month high against a basket of major currencies on Thursday, taking a pause after rallying due to a shake-out of long positions in sterling and a drop in the euro. The euro edged up 0.1 percent to $1.3604, holding slightly above a three-month low of $1.3587 set on Wednesday.

The dollar was trading against the Indian rupee at Rs 58.81, the US currency was at 3.2200 in terms of the Malaysian ringgit and the greenback was available at 6.252 in relation to the Chinese yuan. Inter bank buy/sell rates for the taka against the dollar on Thursday. 77.63-77.63 (77.63-77.6325). Call Money Rates: 05.40-07.25 percent (previous 05.40-07.25 percent).

In the final Asian trade, the yen’s advance to multi-month highs against the euro stalled on Friday as investors booked profits before the weekend. The euro fetched 138.14 yen, off a four-month low of 137.98. It was still on track to end down for a fourth straight week and at a loss of 2.5 percent on the month.

The dollar was trading against the Indian rupee at Rs 58.96, the greenback was available at 3.2155 in terms of Malaysian ringgit and the US currency was at 6.2429 versus the Chinese yuan.

At the week-end, the dollar retreated from recent highs against other major currencies and closed lower as traders braced for potentially market-moving meetings next week by the European Central Bank (ECB) and other monetary policymakers.

The dollar, as tracked by the US dollar index of a half dozen currency pairs, was last off 0.18 percent at 80.353. Earlier this week, the index was at highs not seen since early April.

Recorder Report

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