Rupee remained under pressure last week

Observer Report

Islamabad

The rupee remained under pressure despite soft dollar demand in the local currency market amid sluggish activity last week.
The parity showed a steady trend in the open market while it witnessed slight variation in the interbank dealings during the week.
On the interbank market, the dollar has been trading at Rs105 to Rs105.40 for the past three weeks due to soft demand amid political uncertainty.
The dollar is currently trading at a 22-month high against the rupee.
The rupee is likely to remain under pressure because of rising demand by the corporate sector for its payments in the coming months.
The rupee-dollar parity started last week in minus before slipping to Rs105.39 and Rs105.41 from the previous week’s closing level of Rs105.33 and Rs105.35.
On Tuesday, the rupee traded flat against the dollar trading at Rs105.39 and Rs105.40 due to almost flat demand.
The rupee strengthened against the dollar on Wednesday to Rs105.32 and Rs105.36 amid sluggish demand for the dollar.
The parity turned negative on Thursday when it reverted to the week’s highest levels at Rs105.39 and Rs105.40 amid modest demand.
The parity did not show any change on Friday, closing the week flat at Rs105.39 and Rs105.40. Against the rupee.
In the open market, the rupee continued to show a steady trend against the dollar.
After closing in minus in the prior week, the rupee started last week unchanged at Rs107.30 and Rs107.50.
It did not show any change in the following three sessions and continued to trade flat against the dollar at Rs107.30 and Rs107.50 in all the four trading sessions.
The dollar ended the week flat at Rs107.30 and Rs107.50 amid flat demand and sluggish activity in the absence of major currency players who preferred to remain on the sidelines ahead of Supreme Court’s judgment in the Panama Papers case.
The rupee has been one of the best performing currencies in Asia for over three years despite the dollar’s sharp appreciation against other currencies in overseas trade.
The rupee previously remained in the range of Rs98 and Rs101 for several months amid fluctuations before staring falling in January 2015.
It traded between Rs104 and Rs105 through mid-2016. Since then the dollar has been on the rise.
The rupee came under renewed pressure towards the end of 2016. Currently, the dollar is trading against the rupee close to a level first seen in October 2013.
Against the euro, the rupee remained depressed last week, falling to its lowest level in nearly two and a half years. The rupee fell to Rs125.30 and Rs126.30 on Friday.

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