Dollar exchange rate nears Rs. 140

Thursday, 17 September 2015 00:00 - - {{hitsCtrl.values.hits}}

Reuters: The rupee ended 0.4% weaker on Wednesday, marking a record low for a fourth session in a row due to importer dollar demand, although some exporter conversions of dollars capped the fall, dealers said.

The spot rupee ended at 140.85/95 per dollar, compared with Tuesday’s close of 140.25/35. The lowest deal was done at 140.90 per dollar and the central bank did not intervene in the market, the dealers said.

“Still importer demand is weighing on the currency,” a currency dealer said, asking not to be named.

The market expects the currency to fall further in the short term if the central bank fails to tighten interest rates or the country does not see strong inflows soon.

In a bid to curb dollar outflows on vehicle purchase, the Central Bank on Tuesday imposed a 70% limit on loans and advances for vehicles, a move seen aimed at easing demand for credit and stemming dollar outflows.

Finance Minister Ravi Karunanayake said last week that the rupee will be brought to an acceptable level before too long and interest rates, which have been on a rising trend, will be pushed down.