Friday Dec 13, 2024
Friday Dec 13, 2024
Wednesday, 6 July 2016 00:00 - - {{hitsCtrl.values.hits}}
Reuters: The rupee ended weaker in one-week forwards on Tuesday as late importer dollar demand surpassed greenback sales by a foreign bank, while the market waited for a policy statement from the new Central Bank Governor, dealers said.
Speaking in his first meeting with the media, after market hours, new Central Bank Governor Indrajith Coomaraswamy said the monetary authority would manage the exchange rate flexibly and not have too much volatility.
Capping the spot rate is “something that has been kept constantly under review if and when there is a requirement to move on the exchange rate,” he told reporters.
The spot rupee is tightly managed by the Central Bank and market participants use the forward market levels for guidance on the currency.
Many dealers said the Central Bank did not intervene for the second straight session since the appointment of the new Central Bank Governor.
The rupee in one-week forwards, which have been acting as a proxy for the spot rupee, ended at 147.20/30 per dollar, a tad weaker from Monday’s close of 147.10/20.
“The late importer demand was there. A foreign bank is selling dollars to buy bonds for foreign investors,” a currency dealer said, asking not to be named.
“There was neither moral suasion nor intervention by the Central Bank. Everybody is waiting for some direction by the new Central Bank Governor.”
Central Bank Deputy Governor Nandalal Weerasinghe said the level of Central Bank intervention had come down drastically and it had been absorbing dollars instead of selling.
Both spot rupee and spot-next were not quoted, dealers said.
Reuters: Sterling hit a fresh 31-year low against the dollar on Tuesday, as investors worried about the economic and financial fallout of Britain’s vote to leave the European Union.
The pound, the asset that has borne the brunt of market concerns about the economic impact of the vote, slid as much as 1.3% on Tuesday to hit $1.3112, its lowest since September 1985. That left it around 12% below its levels before the 23 June referendum.
Sterling did briefly inch higher after Bank of England Governor Mark Carney, speaking following the publication of the Bank’s semi-annual Financial Stability Report, said the fall in the currency should help ease the balance of payments shortfall, but it then gave up those gains to trade down 1.1% on the day by 1130 GMT at $1.3143.
The BoE also expressed concern about a fall in investor demand for British assets – which could make it harder for the country to finance its large current account deficit – as well as trouble in commercial real estate making it harder for businesses to use their property as collateral to obtain loans.
A survey of Britain’s services sector showed that uncertainty in the run-up to the referendum had slowed growth last month to a three-year low, and sent business expectations to their weakest since 2012.
