Rupee ends firmer on dollar selling by banks

Reuters: The rupee closed slightly higher on Monday on dollar selling by banks late in the day, while increased imports and selling of rupee bonds by foreign investors weakened the outlook for the currency, dealers said.

Rupee forwards were active, with two-week forwards closing at 152.40/60 per dollar, compared with Friday’s close of 152.60/80.

“Couple of banks were on the selling side at the latter part of the day; maybe some exporter flows and some of their own inflows,” said a currency dealer, asking not to be named.

The spot currency was quoted at 151.75/152.40 per dollar, but was not traded.

The country’s Central Bank raised the spot rupee reference rate by 25 cents to 151.60 on Monday, dealers said. It has been preventing spot rupee trades below 151.35 per dollar since 8 March, dealers said.

Central Bank officials were not available for comment.

Foreign investors net sold government securities worth Rs. 1.41 billion ($ 9.28 million) in the week ended 15 March, after two weeks of net inflows.

They have net sold Rs. 63.3 billion of such instruments so far this year.

The rupee has fallen 1.59% so far this year, and dealers say they expect the currency to weaken 6-8% in 2017. It lost 3.9% against the dollar last year.