Rupee edges up after hitting record low

Reuters: The rupee inched up after touching a record low yesterday (18 April), with dollar demand from importers offsetting limited selling of the US currency by exporters earlier in the session, dealers said.

The rupee hit an all-time low of 156.50 intraday, plunging further after it touched 156.35 in the previous session, but recovered slightly to close at 156.30/40, slightly firmer from Tuesday’s (17 April) close of 156.35/45.

“The demand was there in and out, but buyers stayed away in the latter part of the day,” a currency dealer said.

Earlier this month, the country’s Central Bank Governor said if the inflation rate could be maintained between 4% and 5%, the depreciation in the rupee would be around 2% or 3%.

Dealers said they expected no impact from the $ 2.5 billion inflow anticipated later this week in two tranches of sovereign bonds, the country’s largest offering in history.

The Central Bank has bought around $ 400 million from the market in the first three months of this year to help build reserves and repay some debt.

The rupee has weakened 1.89% so far this year. It fell 2.5% last year, and 3.9% in 2016.

Dealers said they expect the rupee to gradually weaken and face higher volatility this year due to debt repayments by the Government.

Foreign investors sold Government securities worth a net Rs. 2.4 billion ($ 15.36 million) so far this year through 11 April, Central Bank data showed.