Rupee ends down on mild importer dollar demand

Saturday, 21 April 2018 00:00 - - {{hitsCtrl.values.hits}}

Reuters: The rupee closed weaker in a holiday-shortened trading session on Friday, weighed down by mild importer demand for the greenback, dealers said.

The market was closed at 0630 GMT on Friday due to a half-a-day bank holiday.

The rupee, which was traded at 156.25/35 per dollar in early trade ended at 156.40/50, weaker from Thursday’s close of 156.20/35.

The rupee hit an all-time low of 156.50 on Wednesday.

“Trade was very thin in a shortened trading session. There were no sellers,” a currency dealer said.

Earlier this month, the country’s Central Bank Governor Indrajit Coomaraswamy said if the inflation rate could be maintained between 4% and 5%, the depreciation in the rupee would be around 2% or 3%.

Dealers said they expected no impact from the $2.5 billion inflow anticipated this week in two tranches of sovereign bonds, the country’s largest offering in history.

The Central Bank has bought around $400 million from the market in the first three months of this year to help build reserves and repay some debt.

The rupee has weakened 1.9% so far this year. It dropped 2.5% last year and 3.9% in 2016.

Dealers said they expect the rupee to gradually weaken and face higher volatility this year due to debt repayments by the Government.

Foreign investors sold Government securities worth a net Rs. 2.4 billion ($15.36 million) so far this year through 11 April, the Central Bank data showed.