Rupee steady on State banks’ dollar buying

Thursday, 3 July 2014 00:52 -     - {{hitsCtrl.values.hits}}

REUTERS: The rupee ended steady on Wednesday as exporter dollar sales offset importer dollar demand amid greenback purchases by State banks. Dealers said an increase in net open positions (NOP) by the Central Bank has helped to curb volatility. The rupee ended at Rs. 130.28/30 per dollar, little changed from Tuesday’s close of Rs. 130.28/33. “State banks are buying dollars with bids at 130.28 rupees. There was no (downward) pressure on the rupee after the Central Bank raised NOP with effect from yesterday,” a dealer said. “The rupee may trade between Rs. 130.40 and Rs. 130.50 in the event of any downward pressure in the next one month. We do not see any reason for imports to pick up. But we expect imports and credit growth to pick up from August.” An official at the Central Bank’s International Operations Department said it has been buying excess dollars from the market after importers bought for their requirements. The official said the Central Bank has absorbed around $ 25 million in the last few days and the monetary authority has bought around $ 575 million from the market so far this year to curb excess volatility. Some dealers expect the rupee to face downward pressure due to continued imports and the possible fallout from the Government Spokesman saying the country had imported Iranian crude via third parties. Currency dealers said it was too early to speculate on the implications of the country breaching US sanctions.