20000313

Modest recovery

in currency

markets

SEEMA SHAFI

KARACHI: The rupee picked up three paisa for buying at Rs 54.15 and four paisa for selling Rs 51.18 against the dollar in kerb market last week following a significant supply of the US currency amid improved activity.

In inter-bank market, the local currency firmly held its prevailing levels and traded almost within a band of Rs 51.88 and Rs 51.90 against the dollar in normal trading.

Commenting on the fresh increase in the value of the rupee in kerb, currency monitors said that major factors contributing to upward trend of the rupee versus the dollar.

Firstly, increasing supply of the dollar from overseas Pakistanis specially on the occasion of Eid-ul-Azha helped the rupee to recover more ground versus the greenback.

Secondly, leading investors were conspicuous by their absence as bullish stock market attracted them from the currency business.

Explaining the recent developments on the Karachi Stock Exchange (KSE), they said that much awaited factor for the stock exchange worked in shrinking activity in money market.

The local shares turned bullish as news finally materialised when White House confirmed that President Clinton will visit Pakistan on March 25.

Business circles hailed President Clinton's decision to visit Pakistan and were hoping that this would boost confidence of foreign investors in the country.

At the same time, expectations about the European currencies better performance in the near future could be a chief factor behind the rupee's recent rise.

Anticipation of more loss in currency business, a number of small investors visited the kerb market to sell the US units in wake of sliding trend of the dollar. They furhter said that absence of speculators also contributed to recent appreciation in the value of the rupee.

In addition, news from the economic front, notably in the wake of a good cotton crop of 10 million bales and over 10 percent increase in textile exports are some of the other stimulating factor, not encouraging most of the investors to buy more greenback for the time being.

According to some experts, the government has taken many steps towards revitalising industrial and financial sectors. It is too early to judge the outcome of economic measures adopted by the present regime. The next budget will be a great deal about the future.

KERB MARKET: On Monday, significant supply of the dollar, pushed the rupee higher with a gain of four paisa against the greenback at Rs 54.18 and Rs 54.22. On Tuesday, the rupee picked up two paisa more against the dollar at Rs 54.16 and Rs 54.20 in the absence of speculative buying.

On Wednesday, the rupee extended its overnight gains, picking up six paisa for buying and five paisa for selling at Rs 54.10 and Rs 54.15, respectively.

On Thursday, the rupee gave up its overnight gains shedding five paisa for buying against the dollar at Rs 54.15 and three paisa on the selling side at Rs 54.18.

On Friday and Saturday, the rupee did not show any change in its overnight levels for buying and selling versus the dollar in modest business.

INTER-BANK RATES: On March 6, the rupee maintained its weekend's levels versus the dollar at Rs 51.88 and Rs 51.89 in normal activity. On March 7, the rupee after maintaining a stable trend shed one paisa in relation to the dollar at Rs 51.89 and Rs 51.90.

On March 8, the rupee did not show any change in its buying rate at Rs 51.89, while it gained one paisa for selling at Rs 51.89. On March 9 and 10, the rupee maintained its overnight level for both the buying and selling at Rs 51.89 in slow business.

On March 11, the rupee gained one paisa on buying side at Rs 51.88 while it maintained its selling level at Rs 51.89 versus the dollar.