Rupee ends firmer on exporter dollar sales

Wednesday, 9 November 2016 00:01 - - {{hitsCtrl.values.hits}}

Reuters: The rupee ended firmer on Tuesday as dollar selling by exporters outpaced demand for the greenback from importers, dealers said.

Rupee forwards were active, with one-week forwards ending at 148.10/15 per dollar, compared with Monday’s close of 148.20/30.

“Overall, the trading was dull. We expect the downward pressure on rupee to ease off with the budget and a pickup in remittances,” a currency dealer said, asking not to be named.

Deputy Central Bank Governor Nandalal Weerasinghe said the usual seasonal demand in November, just ahead of the budget scheduled for Nov 10, has resulted in downward pressure on the rupee.

“With the remittances coming in, the trend will get reversed in December,” he told Reuters.

The rupee has been under pressure by selling of government securities by foreign investors, dealers said.

Foreign investors have net sold Rs. 24.5 billion ($ 165.6 million) worth of government securities in the three weeks ended 2 November, data from the Central Bank showed.

Last week, the Sri Lankan Central Bank Governor said he expected the rupee to stabilise when a stake sale worth $ 1 billion in the southern port of Hambantota to a Chinese investor is completed in four to five months.

Governor Indrajit Coomaraswamy said proceeds of the stake sale would be converted into rupees, easing the strain on the currency that has been weighed down since mid-September due to seasonal demand for the US dollar from importers.