Rupee hits 7-week low on importer dollar demand

Friday, 12 September 2014 01:24 -     - {{hitsCtrl.values.hits}}

Reuters: The rupee slid to a more than seven-week low on Thursday as importers bought more dollars, offsetting remittances and purchases by exporters, dealers said. Dealers said they were forced to trade in the three-day forward contract as a State-owned bank sold dollars in the spot market at 130.28 per dollar to prevent any more drops in the currency. The rupee, which had touched a 10-week low of 130.33/35 per dollar in early trade, ended a tad firmer at 130.28/31, but still at its lowest since 21 July and weaker than Wednesday’s close of 130.25/29. “There was import demand from both general traders and vehicle importers; the forward trade was active as a State bank was selling dollars at 130.28 for select trades,” said a currency dealer asking not to be named. Dealers said there has been a pick-up in imports ahead of the 2015 Budget scheduled for November, but they expect the rupee to appreciate in the long term. The Central Bank of Sri Lanka (CBSL) will absorb the proceeds of National Savings Bank’s (NSB) $250-million bond sale, an official at the banking regulator said on Wednesday. “It is not going to the market, it is likely that CBSL will get the dollars,” the official said on condition of anonymity. Foreign investors sold a net Rs. 3.45 billion ($26.5 million) worth of Government securities in the week ended 3 September, official data showed.