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Dollar continues to show stability in the first week of 2019

January 4, 2019

Photo: AFP

The US dollar continued to trade at Rs139.2 against the rupee in the open market on Friday morning.

The greenback has been hovering at this level for three weeks now, an indication that it has achieved stability after keeping buyers and sellers on their toes throughout 2018, one of the most volatile years in terms of exchange rate fluctuations.

Since hitting its all-time high of Rs140.3 in November, the dollar had been trading in a close range of Rs139 to Rs140 and showed no major fluctuations unlike rest of the year.

In the outgoing year, the dollar appreciated by Rs4 or more in one day on at least five occasions and fell by as much during intra-day trade only once. Overall, the dollar’s rate has appreciated 27% against the rupee, witnessing two of its biggest ever single day jumps in the short span of one-and-a-half months.

Related: 2018: A volatile year for the dollar

Market analysts say the dollar may go up in case of a further delay in availing a loan from the International Monetary Fund to increase our dollar reserves. At the end of 2018, the central bank’s foreign exchange reserves fell by $170 as it held $7.28 billion to finish the year. This is barely enough to pay for two months of our imports thus not sustainable. The shortage of dollars will keep the rupee under pressure, experts say.

Prior to the recent increases, some analysts predicted the dollar would cross Rs140 level but a few even said it might touch Rs150 by June 2019.


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