While the US dollar is going down below historic levels against almost all currencies, it has broken through a historic high against the Pakistan rupee. What is the contributing to this counter trend, particularly considering that Pakistan economy is reported to growing at a tear while the US economy is stagnant to receding? Plus, the Pakistani borrowing are reported to have been brought down to a much lower level than recent decades, so it cannot be deb servicing that is eating up their currency.
I don’t get it - what is going on?
BTW this is worrisome to us Indians too - with the Indian rupee gaining almost 15% against the USD in the last 18 months or so, Indian exports have become expensive; now all we need is Pakistan rupee becoming even cheaper that it was!
**US dollar rises to historic high against rupee
**
Sunday, April 20, 2008
By our correspondent
KARACHI: The US dollar touched the historic level of Rs64.05 against the rupee in the inter-bank market while in kerb dealings it jumped to Rs64.40 during the week ended on April 19.
The rupee remained under tremendous pressure against the dollar and some other major currencies in the inter-bank as well as open market during the week under review.
Earlier, the US currency had shown an unprecedented surge in May-June 1998 in the backdrop of nuclear tests by Pakistan. “The US currency traded at historic levels as it crossed Rs64 for the first time against the rupee. Earlier, the greenback had tested Rs63.80 level in inter-bank market dealings during the first week of June 1998,” Ayaz Messam at Khanani and Kalia said and added that rising demand for the US dollar from oil companies coupled with upward movement of the currency in the inter-bank market kept the rupee under pressure.
On the last trading day of the week, the dollar commenced trading at Rs63.90 and was changing hands at Rs64.05 at the close of market. Thus, the rupee lost another 15 paisa versus the dollar in inter-bank dealings. It may be noted that US currency had started current week’s trading at Rs63.13 on Monday and culminated at Rs64.05 on Saturday.
The impacts of severe pressure on rupee against greenback in inter-bank market also witnessed in open market dealings.
In open market the US dollar started off new week’s trading at Rs63.80, and was changing hands at Rs64.40 at close of market. The national currency incurred a loss of 0.60 paisa versus dollar in the kerb market.
Euro, the common currency of 15 European nations, continued upward movement versus rupee in the open market amid escalating demand for euro in the local market.
However, euro lost grounds against dollar in the international market on Saturday. The single currency opened new day’s trading at Rs100.80, after recording gains was changing hands at Rs101.60 at close of markets.
Thus, rupee ended last trading day on a negative note by incurring loss of 0.80 paisa versus euro in the open market dealings. On the international desk, the euro briefly trimmed losses against the dollar after European Central Bank Governing Council member Klaus Liebscher said he saw no scope for a cut in interest rates in the euro zone.
In addition pound sterling remained stronger versus rupee in the kerb dealings during the week under discussion on the back of rising demand in the local market and robust performance in the intentional market.
Pound sterling kicked off new day’s trading at Rs126 continued to post gains and was trading at Rs128.40 at close of markets. Thus, rupee registered heavy losses of Rs2.40 versus UK pound in the kerb market.
However, Japanese yen depreciated versus rupee in the kerb dealings this week. Yen set off new week’s trading at 0.62, and was being traded at 0.618 at close of markets on Saturday.
