Rupee ends slightly weaker on importer dlr demand

Tuesday, 9 May 2017 00:00 -     - {{hitsCtrl.values.hits}}

Reuters: Rupee forwards ended slightly weaker on Monday on mild dollar demand from importers, but anticipated dollar inflows from sovereign bonds and syndicated loans prevented steeper losses in the local currency, dealers said.

Rupee forwards were active, with the spot-next ending at 152.80/85 per dollar compared with Friday’s close of 152.70/80. Two-week forwards closed at 153.10/20 per dollar, edging down from Friday’s close of 153.00/20.

The spot rupee, which started trading on Friday after four months, was not active, with the Central Bank’s reference rate at 152.10.

“There was some (importer dollar) demand. There was not much of conversions may be due to the holidays. Exporters may wait till next week,” a currency dealer said.

“But most investors are on the sidelines awaiting inflows.”

Markets will be closed on Wednesday and Thursday to mark a Buddhist religious holiday.

Sri Lanka drew a blowout response in its return to the international bond market, attracting orders of more than $ 11 billion from 500 accounts for a $ 1.5 billion 10-year bond.

Currency dealers expect higher dollar liquidity from the inflows to help stabilise the rupee.

The country expects another $1 billion from two separate syndicated loans.

The Central Bank has allowed the currency to gradually depreciate since mid-December, revising its spot reference rate multiple times. It has said that defending the currency with foreign exchange reserves did not “seem sensible”.

The island nation has seen inflows into equities and government securities since early April.