Rupee edges down on importer dollar demand

Reuters: The rupee ended slightly weaker on Thursday on importer dollar demand and as foreign investors sold bonds in the absence of central bank intervention, said dealers.

Rupee forwards were active, with the spot-next closing at 147.45/50 per dollar, compared with the previous close of 147.40/50.

The spot rupee was quoted at 146.90/95 per dollar, but was hardly traded. It was steady last week after two weeks of losses.

The spot rupee is usually managed by the central bank, and market participants use the forward market levels for guidance on the currency.

“We see both importer dollar demand and foreign selling in local bonds,” said a currency dealer, asking not to be named. “There is a bit of uncertainty with the budget coming up next month. So, all are waiting for some firm direction.”

The government is due to present its national budget on 10 November.

The Central Bank has been buying dollars from the market to accumulate reserves to meet targets set by the International Monetary Fund under a $ 1.5-billion loan deal, dealers said.

Officials at the Central Bank were not available for comments.

Dealers said they expected the rupee to remain under pressure due to seasonal imports.