950818

Bankers see rupee/dollar

parity at Rs 32 by year's end

RECORDER REPORT

KARACHI: The central bank fixed the new official rates for buying dollar at Rs 31.32 and selling at Rs 31.47, showing another seven paisa downward adjustment against the US dollar in a week.

Within two weeks this was the second downward adjustment, third in 30 days. On August 8, the SBP had fixed the spot rate for buying and selling at Rs 31.25 and Rs 31.40 respectively. Prior to this on July 18, the SBP had fixed the rate at Rs 31.19 for buying and Rs 31.34 for selling.

While on July 12, the buying rate was fixed at Rs 31.12, the selling rate was Rs 31.27. In July alone three quick downward adjustments were made and in August one which caused the rupee to weaken by 25 paisa against the dollar. Money market sources said that the central bank move was a technical one, having no relation to the weakness of the rupee. After the announcement of the national budget on June 14, the rupee has cumulatively lost 35 paisa against the dollar in six downward adjustments since June 28. The bankers are of the opinion that the official parity of the rupee could stabilise around Rs 32 a dollar by the end of the year as the government ties to sustain the current boost in exports.

The achievement of this year's export target of 9.2 billion dollars is likely to force the government to go for further downward revisions in the rupee parity in the coming months. In the first eight months, the rupee has so far lost 52 paisa against the dollar. In the past 12 months, the rupee cumulatively declined by 73 paisa against the dollar. The dollar was quoted at Rs 30.59 for spot buying on August 8, last year.

Meanwhile, after the fresh adjustment in the official rupee dollar parity on August 15, the rupee recorded fresh gains against most of the currency units on the foreign exchange counters and at the close of the week displayed strength in relation to the pound sterling, Australian dollar, Austrian, schilling, Belgian franc, Danish krone, Dutch guilder, Italian lira, Japanese yen, Kuwaiti dinar, Malaysian ringgit, Norwegian krone, New Zealand dollar, Singapore dollar, Spanish pesta, Swedish korna, Swiss franc and German mark.

But the rupee slid against the Canadian dollar, Chinese yuan, Qatari riyal, Saudi Arabian riyal and UAE dirham.

In kerb trading, the rupee opened the week higher and reflected a gain of 30 paisa against the dollar over the previous week's close. It moved both ways but finally ended at Rs 32.63 and Rs 32.66 for buying and selling, on August 17, 1995.

Other currencies showed strength in kerb market during the week. The pound sterling moved down from Rs 51.10 to Rs 50.75, Australian dollar from Rs 23.83 to Rs 23.68, French franc from Rs 6.51 to Rs 6.43, Deutsch mark from Rs 22.60 to Rs 22.10, Dutch guilder from Rs 20 to Rs 19.62 and Japanese yen from Rs 0.344 to Rs 0.332. A few currencies weakened in the kerb. The Canadian dollar from Rs 23.80 to Rs 23.95, Hong Kong dollar from Rs 4.14 to Rs 4.17 and Kuwaiti dinar from Rs 106.55 to Rs 106.85.