Rupee ends firmer on moral suasion; forwards pick up
Reuters: The rupee ended a tad firmer on Wednesday as moral suasion by the Central Bank averted a further fall amid sustained importer dollar demand, forcing dealers to trade in currency forwards, dealers said.
The rupee ended at 130.28/32 per dollar, compared to Tuesday’s close of 130.31/40.
Dealers said moral suasion by the Central Bank prevented trades above 130.28 and forced trading in forwards.
“Nothing is being traded above 130.28. There is importer dollar demand, but moral suasion is there,” said a currency dealer, asking not to be named. Another currency dealer confirmed the move.
“At the moment the spot is trading at 130.28 and when money flows into the market in future, we can’t hold this. Cash and forwards are trading,” a Central Bank official said.
The three-day forwards, or spot next, was traded at 130.37 per dollar intra-day, ending the session at 130.36 compared to Tuesday’s 130.32/38.