Rupee falls on dollar demand from banks

Reuters: The rupee ended weaker on Tuesday as dollar demand from banks and importers surpassed selling of the greenback by exporters, dealers said.

The spot rupee which was traded at 153.40 per dollar during the day, recovered and ended at 153.10/20 per dollar. It closed at 153.05/10 on Monday.

“A foreign bank bought (dollars) today, probably for takeovers,” said a currency dealer requesting anonymity, referring to last week’s big ticket equity deals in the market.

“There were some exporter conversions also today,” the dealer added.

Last week, diversified conglomerate Hayleys Plc said it purchased 61.73% of Singer Sri Lanka Plc for Rs. 10.9 billion ($ 71.27 million) from Retail Holdings (Sri Lanka) BV a subsidiary of Retail Holdings .

The rupee has been under pressure since January after the central bank stopped defending the currency and started buying dollars to build up the country’s depleted foreign currency reserves.

The island nation saw Rs. 17.1 billion ($ 111.69 million) of net inflows into equities up to Tuesday’s close, and Rs. 9.4 billion worth inflows into government securities as of 13 September, official data showed.