IN the local currency market, aggressive dollar buying since past several sessions sent the rupee to record lows against dollar and euro amid weakening economic indicators.

Dollar and euro both were riding high against the rupee this week. In the week’s early sessions, the dollar was seen close to Rs100 in the open market and near Rs99 in the interbank dealings where as euro was trying to breach Rs140 barrier. Had the State Bank of Pakistan not intervened in the market to rescue the rupee early this week, the greenback would have hit historic highs after crossing Rs100 mark by weekend, according to the leading currency dealers and experts.

On the interbank market, mixed sentiments were observed after the central bank move to stop dollar from climbing further against the rupee. Though the rupee managed to restrict sharp declines versus dollar, recovering partial losses, it remained under pressure this week. The rupee/dollar parity traded in the negative territory during the first trading session as the rupee shed 49-paisa against the dollar on the buying counter and also posted 48-paisa loss on the selling counter and traded at Rs98.14 and Rs98.18 as against previous week close of Rs97.65 and Rs97.70.

However, the central bank intervention helped the rupee recover 19-paisa against the dollar for buying and another 18-paisa for selling, pushing dollar slightly lower at Rs97.95 and Rs98.00 in the second trading session. The rupee extended further gains in the third trading session, picking up 25 paisa against the dollar at Rs97.70 and Rs97.75. The dollar further drifted lower in the fourth trading session as the rupee sharply picked up 33-paisa and was changing hands against dollar at Rs97.37 and Rs97.42. The rupee managed to gain 58-paisa against the dollar in the last three sessions. But in the last trading session, the rupee lost firm ground versus dollar and shed 13-paisa before closing the week at Rs97.50 and Rs97.55.The dollar in the interbank market, however, lost 15-paisa over the previous weekend.

In the open market, the rupee managed to halt dollar from hitting Rs100 mark after the central bank intervention early this week. The week commenced on a dismal note with the rupee continuing its downslide, amid panic dollar buying in the week’s opening session that pushed dollar to all time high at Rs99.00 and Rs99.20, falling just 80 paisa short of Rs100 psychological barrier and up 60 paisa over the previous weekend’s Rs98.40 and Rs98.60. However, the central bank decision to slash discount rate by 50 bases points and its subsequent meeting with the money changers on December 17 helped restrict the dollar from rising further. As a result, the rupee posted 50 paisa gain against the dollar in the second trading session, pushing it slightly lower at Rs98.50 and Rs98.70.

The rupee/dollar parity retained its overnight level in the third trading session when the dollar traded unchanged against the rupee at Rs98.50 and Rs98.70. The rupee further extended its overnight firmness for the second straight day, picking up 60-paisa to close the fourth trading session at Rs97.90 and Rs98.10. The week ended on a positive note with the rupee posting ten-paisa gain against the dollar at Rs97.80 and Rs98.00 in the last trading session. On week-over- week basis, the rupee in the open market appreciated by 60-paisa against the dollar this week while dollar suffered 1.2 per cent decline in rupee term against the week’s opening session historic peak.

Versus the European single common currency, the rupee this week traded range bound after hitting record lows amid fluctuations. It shed 40 paisa in the first trading session, last changing hands at Rs129.30 and Rs130.30 against previous weekend’s Rs128.90 and Rs129.90. It, however, managed to stage a mild recovery from overnight losses in the second trading session when it posted 10 paisa gain at Rs129.20 and Rs130.20. But its overnight firmness proved short-lived as euro rebounded sharply, climbing to its highest level at Rs129.80 and Rs130.80 after 60 paisa decline in rupee value in the third trading session. In the fourth trading session, the rupee picked up 80 paisa against the euro which slipped from record highs and was last at Rs129.00 and Rs130. The rupee further gained 40 paisa and traded at Rs128.60 and Rs129.60 in the last trading session, up 0.9 per cent from previous session record lows. During the week in review, the rupee appreciated by 0.2 per cent versus euro.

On the international front, the euro fell back from its 8-1/2-month high of $1.3191 to trade at $1.3160 in New York first trading session. The yen also dropped to a 20-month low against the dollar which rose by 0.46 per cent and last traded at 83.85 yen.

The dollar is up nearly nine per cent on the yen with two weeks to go in the year. In London, sterling rose against the dollar to $1.6217, hitting its highest level since early October. The pound last traded up 0.3 per cent on the day at $1.6206.

On December 20, currencies held to tight ranges in thin pre-holiday trade, with the euro see-sawing against the dollar. In late New York trade, the euro recouped midday losses to gain 0.13 per cent, trading at $1.324 3 after hitting an 8-1/2 month high of $1.3308 on December 19.

At the close of the week on December 21, the euro slipped by 0.5 per cent to $1.3172, its worst daily showing in two weeks.

The dollar, however, lagged the yen, as investors trimmed large short positions against the safe-haven Japanese currency. It was down 0.3 per cent at 84.14 yen, below its recent 20-month high of 84.62 yen. In London, Sterling fell 0.5 per cent to $1.6203, retreating from a three-month high of $1.6307 hit on December 19.