Rupee remains steady versus dollar

The local currency market witnessed dull trading activity for the second consecutive week with the rupee/dollar parity exhibiting minor variations, trading both ways.

Dollar supplies were sufficient to cover lacklustre demand in the interbank dealings as well as open market where the dollar and euro continued to show slight strength during the week. Forex dealers are of the view that domestic equity market supported the rupee, but dollar's strength against other major currencies limited the gains.

Analysts project that the dollar is likely to trade at Rs106.00 by the end of the first quarter but they fear that it might cross Rs108 mark by the end of the fourth quarter.

On the interbank market, the rupee/dollar parity hovered in narrow range against the dollar last week with the rupee moving both ways and showing minor changes against the dollar. After trading almost flat at Rs104.91 and Rs104.93 on the interbank market in the prior week that ended January 16, the parity commenced the week on a negative note with the rupee losing three paisas on the buying counter and two paisas on the selling counter, trading against the dollar at Rs104.94 and Rs104.95 in the first trading session.

There were sufficient dollar supplies to meet demand for making import payments. During the week in review, there were sufficient dollar supplies to meet demand for mak- ing import payments.

The central bank kept providing dollars to the commercial banks for supporting the rupee from falling against the greenback. Against the rupee, the dollar in the interbank market, however, closed the week with a gain of three paisas on the buying counter and another two paisas rise on the selling counter on week on week basis.

In the open market, the parity traded range bound last week. The rupee traded almost flat against the dollar in the first trading session, retaining prior weekend level unchanged at Rs106.10 and Rs106.30. In the second trading session, the dollar was seen changing hands at Rs106.10 and Rs106.40.

The parity did not show any change in the third trading session as the rupee continued to trade flat against the dollar for the second day in a row at Rs106.10 and at Rs106.40. The rupee, however, lost 10 paisas in the fourth trading session that enabled the dollar to hit five-week highs at Rs106.20 and at Rs106.50. The dollar was last seen trading on this level on December 21, last year.

The rupee staged a recovery against the dollar in the last trading session, ending the week on a firm note. It posted 10 paisas gain before closing the week at Rs106.10 and at Rs106.40. On week on week basis, the dollar in the open market gained ten paisas on the selling counter while trading flat against the rupee on the buying counter.

Against euro, the rupee traded both ways between the low of Rs116.25/117.25 and high of Rs115.80/116.80. During the week, the rupee managed to gain 50 paisas against euro on week-on-week basis.