Friday, 21 March 2014 04:38
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Reuters:The rupee edged lower on Thursday due to importer dollar demand despite State banks selling the greenback at 130.65 levels, a day after the Central Bank Governor said the local currency would continue its stable trend for the rest of the year.
Central Bank Governor Ajith Nivard Cabraal said on Wednesday the rupee would be stable throughout this year due to rise in inflows through exports and remittances into the country.
The spot rupee ended at 130.63/68 per dollar, weaker than Wednesday’s close of 130.60/63.
Some dealers said the three-day forward or spot-next traded actively in early trades and two State banks, through which the Central Bank directs the market, sold dollars to select banks at Rs. 130.65, a level seen as the Central Bank’s desired level for the rupee.
“There was import demand (for dollars). We have seen two State banks selling dollars at 130.65 to smaller banks,” said a currency dealer on condition of anonymity.
Contrary to market expectations, the local currency has been gaining ahead of the traditional New Year in April. Usually, the rupee falls in March and early April due to higher import demand ahead of the Sinhala-Tamil New Year.
The currency has gained 0.3% in the 16 sessions through Thursday, Thomson Reuters data showed. It has been on a rising trend since 27 February amid weak demand for dollars from importers, dealers said.
Dealers said the rupee was expected to trade in a range of 130.50 to 130.75 in the near term.
