Well the Pakistani experts have other thoughts than terrorism responsible for weaker Rupee,
It's due to oil imports
Forward Dollar Buying Pressures Rupee
Monday, 14 Dec, 2009 | 07:57 AM PST |
In the local currency market, the rupee came under renewed pressure versus dollar this week. Despite rising workers remittances from abroad, heavy dollar purchases by banks to cover oil import payments forced the rupee to breach psychological barrier in the inter-bank as well as open market during the week with dollar crossing Rs84 barrier and the rupee touching historic lows for the year.
The central bank’s decision that commercial banks and private sector will make oil import payments from December 14, resulted in dollar’s forward buying which made dollar expensive, pushing the rupee to its lowest level since October 2008 historic lows.
On the inter-bank market this week, the rupee was seen in the negative territory on the opening day as it shed 45 paisa against the dollar on the buying counter and another 48 paisa on the selling counter. The dollar broke Rs84 barrier and traded at Rs84.12 and Rs84.18 on December 7 after closing last week at Rs83.67 and Rs83.70. The decline in the rupee value persisted on the second trading day. The rupee further shed three paisa on the buying counter and another two paisa on the selling counter to trade at Rs84.15 and Rs84.20 against the dollar on December 8.
The rupee weakness continued on December 9, which posted another five paisa decline against the dollar, changing hands at Rs84.20 and Rs84.25, due to heavy dollar buying by the private sector. However, the parity did not show any change on December 10 and managed to recover some of its losses on the fifth trading day with the rupee gaining 15 paisa and changing hands against the dollar at Rs84.05 and Rs84.10 on December 11. During this week, the rupee in the inter-bank market lost 40 paisa against the dollar.
In the open market, the rupee this week remained depressed as the dollar continued to advance opening the week on a negative note. The rupee had ended last week at Rs83.60 and Rs83.70. It further drifted lower in terms of dollar, shedding 15 paisa to trade at Rs83.75 and Rs83.85 on December 7. On December 8, the rupee further shed 15 paisa and traded against the dollar at Rs83.90 and Rs84.00. The rupee/dollar parity remained unchanged and traded at its overnight level on December 9.
The dollar attained new highs in the open market on December 10 as the rupee breached Rs84 barrier and touched historic lows after shedding 30 paisa against the dollar which traded at Rs84.20 and Rs84.30. Last year in October, the rupee had crossed Rs87 against the dollar. The rupee continued its decline against the dollar in the open market and lost 20 paisa on December 11 when dollar traded at Rs84.40 and Rs84.50, the second highest in 14 months. During the week in review, the rupee in the open market lost 80 paisa against the US currency.
Versus European single common currency, the rupee this week maintained a firm trend. It commenced the week on a positive note, gaining Rs2.15 to trade against euro at Rs122.50 and Rs123.00 on December 7 after closing last week at Rs124.65 and Rs125.15. On December 8, the rupee failed to hold its overnight firmness and shed 90 paisa, changing hands against euro at Rs123.40 and Rs123.90. But the rupee weakness proved short lived as it managed to recover 65 paisa on December 9 when euro traded at Rs122.75 and Rs123.25.
On December 10, the rupee overnight firmness persisted for the second day in a row, as it posted another 65 paisa gain and traded at Rs122.10 and Rs122.60 against euro. But in the fifth trading session, the rupee reacted negatively versus euro as it posted fresh losses on December 11, shedding Rs1.80 on the buying counter and another Rs1.60 on the selling counter to trade at Rs123.70 and Rs124.20. On cumulative basis, however, the rupee this week managed to gain 95 paisa against the European single common currency.
On the international front, the dollar hit its highest level against the euro in more than a month on December 7. In New York, the euro was trading at $1.4810, down about 0.3 per cent, after earlier hitting $1.4757, its lowest level since November 4. The dollar fell 1 percent to 89.52 yen. The euro hit a 2009 high above $1.5140 last month and an all-time high above $1.60 in mid-2008. Yen strength was mostly tied to a reversal after the dollar’s 2.5 per cent gain against the Japanese currency last weekend. Sterling fell to its weakest in 10 days against a broadly firmer dollar in London, trading 0.1 per cent lower at $1.6428, having earlier hit a 10-day low of $1.6314.
On December 8, the euro slipped against the dollar, weighed by concerns about Greece’s fiscal health after Fitch downgraded the country’s credit rating. In early New York trade, the euro was down 0.5 per cent at $1.4746, while the dollar stayed weak against the yen, however, falling 1.4 per cent to 88.23 yen. Sterling weakened on deepening concern over Britain’s fiscal health. It hit a six-week low of $1.6254, before closing the day at $1.6300, down 0.9 per cent.
On December 9, the dollar fell against the euro, snapping a three-day advance. In early New York trade, the euro was up 0.2 per cent at $1.4734, having swung between a low of $1.4670 and a peak of $1.4782 according to Reuters data. The dollar fell 0.6 per cent on the day to 87.88 yen, edging closer to a 14-year low hit late last month, when fears over Dubai’s debt problems prompted investors to cut carry trades and risk exposure. Sterling rose 0.3 per cent to $1.6327, having earlier hit a near eight-week low of $1.6167.
On December 10, the US dollar was unchanged against the euro despite concern about euro zone deficits. The yen fell after separate reports showed the US trade deficit narrowed in October while the four-week moving average of US jobless claims fell for a 14th straight week. The traded at $1.4726. Against the yen, the dollar was up 0.4 per cent at 88.20 yen though off the session peak of 88.45 yen. Sterling briefly hit a high for the session of $1.6377. It had pulled back some of those gains to trade at $1.6321 against the dollar, up 0.2 per cent on the day,
At the close of the day on December 11, the dollar held steady while the yen lost ground in Tokyo. The dollar rose half a per cent on the Japanese currency, although it was well within ranges of the past month. Against the sterling, the dollar firmed across the board after stronger-than-expected US retail sales and consumer sentiment data boosted optimism about the outlook for the world’s largest economy. The dollar rose 0.5 per cent to 88.68 yen and the euro was steady at $1.4725. In London, sterling was down 0.3 percent against the dollar at $1.6236, having earlier hit a high of $1.6339.
DAWN.COM | Economic & Business | Forward dollar buying pressures rupee
I know the obsession of westren media of terrorism in Pakistan but the intent of this report really looks to scare of Investors who Invest here in Pakistan.
