Rupee ends weaker on importer dollar demand

Thursday, 20 April 2017 00:00 - - {{hitsCtrl.values.hits}}

Reuters: The rupee closed lower for a second day on Wednesday as dollar demand from importers surged amid low supply of the greenback, dealers said.

Rupee forwards were active, with two-week forwards closing at 153.40/50 per dollar, compared with Tuesday’s close of 152.15/25.

“There was importer demand from small banks and we did not see much supply in the market,” said a currency dealer who requested anonymity.

“Some strong inflows could help ease the pressure.” Another dealer said there was heavy demand for dollars from importers running high trade bills.

The market has not been impacted much after the Central Bank increased policy rates by 25 basis points last month, dealers added.

The island nation has received dollar inflows since the beginning of April, with foreign investors buying equities and government securities.

Overseas investors have net bought Rs. 9.72 billion ($ 63.95 million) worth of equities in the last 19 consecutive sessions through Wednesday.

Offshore investors net bought government securities worth Rs. 1.87 billion in the week ended 12 April.

They have however net sold Rs. 62 billion worth of government bonds so far this year.