Rupee forwards end steady amid dollar selling by banks

Reuters: Rupee forwards ended steady on Wednesday as dollar selling by banks offset demand for the greenback from importers, dealers said.

The spot rupee was not traded as banks were reluctant to trade it below 144.00 levels amid moral suasion by the Central Bank. Central Bank officials were not available for comment.

Dealers said the one-week rupee forwards, which act as a proxy for the spot currency, ended steady at 144.25/30 per dollar.

The rupee is under pressure despite a 150-basis-point increase in commercial banks’ statutory reserve ratio from 16 January. The Central Bank kept its key policy interest rates unchanged last week.

“The (dollar) selling was there; may be due to the stock-related inflows,” said a currency dealer asking not to be named. The Bourse saw a net foreign inflow of Rs. 2.58 billion ($ 17.95 million) on Tuesday as a major shareholder bought an additional 16% stake in Expolanka Holdings. Commercial banks parked Rs. 55.707 billion ($386.99 million) of surplus liquidity on Wednesday using the Central Bank’s deposit facility at 6%, official data showed.

The Central Bank’s net holding of Government securities increased by Rs. 22.531 billion, official data showed.