20000214

14 paisa

decline in kerb

last week

SEEMA SHAFI

KARACHI: The rupee was slightly lower against the dollar in kerb last week amid fairly modest activity.

It shed 14 paisa in relation to the dollar in kerb at Rs 54.24 and Rs 54.28 while it gained one paisa on the buying side at Rs 51.88 and Rs 51.89 for selling in inter-bank market.

Market analysts observed that the rupee came under pressure in middle of the week as some leading investors bought dollars on anticipation of furhter increase in its value. However, some money changers were expecting that easing supply of the US currency may help the rupee to recover its ground in relation to the dollar.

Commenting on the stability of the rupee in early sessions of the week, experts said that the rupee got a boost following the statement by Federal Finance Minister Shaukat Aziz that the national Gross Domestic Product (GDP) rate would touch the 4 to 4.5 mark by June 30 of this year.

In order to keep the economic condition in the right direction, he stated that the government had introduced many policies aimed at achieving sustainable growth and improvement in the economy.

He also said that these policies had shown some positive results, such as improved performance of the stock market and the textile sector.

On the other hand, a report that the State Bank earned a nominal profit of Rs 125-150 million in the first six months of 1999-2000 was an additional factor behind the stability of the rupee.

The central bank had suffered a loss of more than Rs 13 billion on exchange risk cover in the fiscal 1998-99. The cause of the profit as the bankers assesed was the stable rupee for the last six months. On July, 1999 the average price of the US dollar was Rs 51.70 in inter-bank market that remained almost unchanged by the end of December.

KERB MARKET: On Monday, the rupee commenced the week on a firm note, showing no change in its weekend buying level of Rs 54.10 while it shed two paisa versus the dollar on the selling front at Rs 54.15 amid thin activity.

On Tuesday, the rupee did not show any difference in the buying rate against the greenback, however, it picked up two paisa for selling at Rs 54.13.

On Wednesday, the rupee gave up its firmness and shed two paisa versus the dollar at Rs 54.12 and Rs 54.15 for buying and selling, respectively.

On Thursday, the rupee faced a sharp fall of 10 paisa in a single day slide against the dollar at Rs 54.22 and Rs 54.25 for buying and selllng.

On Friday it continued its weakness and shed two paisa more on the buying sector at Rs 54.24 and three paisa on the selling front at Rs 54.28 amid slow business. On Saturday, the rupee did not show any change in its overnight levels.

INTER-BANK RATES: The rupee remained unchanged at Rs 51.90 for both the buying and selling on February, 7, 8 and 9 in process of modest business. On February 9, the rupee depicted small gain of one paisa for buying at Rs 51.89 while it remained unchanged on the selling front at Rs 51.90 in process of normal activity.

On February 11, the rupee extended its overnight gains and picked up one paisa for buying at Rs 51.88 and did not show any change in its overnight selling rate. On February 12, the rupee did not show any variation on the buying side at Rs 51.88 while it picked up one paisa on the selling front at Rs 51.89 in low business.