20000207

Stable trend in inter-bank market

SEEMA SHAFI

KARACHI: The rupee maintained a firm posture against the dollar in inter-bank transactions amid sluggish activity during the last week.

The rupee did not show any change in relation to the US currency in inter-bank market at Rs 51.90 for buying and selling, while it shed 10 paisa on the buying sector at Rs 54.10 and eight paisa on the selling front at Rs 54.13 in kerb as most of the market players kept to the sidelines fearing less profit margin.

Explaining the rupee's steadier trend, Ovais Kalia of KKI said that the dollar is not in demand now-a-days owing to smooth supply of the US currency.

Some money changers shared this view and said that the Forex Association of Pakistan (FAP) has planned to keep a watch on the movement of the dollar and fixed a bench mark at Rs 54.40 to ease the availability of the dollar.

In addition, they observed that bullish stock exchange also attracted main investors in the currency business.

Analysts were of the view that expectations on resumption of the International Monetary Fund (IMF) loan to the country and an increase in the foreign exchange reserves were the key factors, which helped the rupee to remain firm in relation to US currency.

They also said that the rupee sustained its prevailing levels after an improvement of seven percent in exports during the six months of the current fiscal.

Currency experts said that the rupee's stability in the coming days would depend on continued improvement in exports and negative trend in imports. "In order to boost our exports, we have to increase export of softwear which stand just at 30 million dollars, while our rival India is earning five billion dolars from the export of the same product".

India wants to become super power in this sector and has set a target of 50 billion dollars softwear exports by 2008.

KERB MARKET: On Monday, the rupee opened the week, on a firm note showing no change in its overnight levels of Rs 54.00 and Rs 54.05. The following day, it continued its firmness versus the dollar due to easy supply of the greenback. On Wednesday, the rupee shrugged off its stability and dropped five paisa in relation to the US currency in low business.

On Thursday, the local currency extended its overnight weakness and shed five paisa more for buying at Rs 54.10 and three paisa for selling at Rs 54.13 amid thin activity.

On Friday, the rupee ended the week on a stable note ahead of long week-end as Saturday (February 5) has been declared as a public holiday. All the trading centres remained closed to observe solidarity with the oppressed people of Kashmir.

INTER-BANK RATES: On January 31, the rupee commenced the week on a stable note, depicting no variation in its week-end levels of Rs 51.89 and Rs 51.90 for buying and selling, respectively.

On February 1, the rupee gave up its overnight gains on the buying front and shed one paisa at Rs 51.90, while it showed no change in its selling rate of Rs.51.90 in modest trading. Rest of the week, it did not show any change in its prevailing levels amid slow business.