Rupee edges down on importer dollar demand

Tuesday, 4 July 2017 00:00 - - {{hitsCtrl.values.hits}}

Reuters: The rupee ended weaker on Monday as late importer dollar demand surpassed sales of the greenback by exporters and banks earlier in the session, dealers said.

Expectations of a rise in imports weighed on the local currency, they added.

The spot rupee, which traded for a tenth straight session after being inactive for six weeks, ended at 153.57/63 per dollar, tad weaker from Friday’s close of 153.55/65.

The spot rupee resumed trading on 19 June for the first time since 5 May when the Central Bank fixed its reference rate at 152.50.

“There was (importer) dollar demand and a lack of supply,” said a currency dealer, requesting anonymity.

Dealers said they expected seasonal demand for the dollar to pick up from August.

Rupee has been under pressure since early this year after the Central Bank stopped defending the currency at a time when the island nation faces a balance of payments crisis.

The Central Bank is also compelled to buy dollars from the market to meet the reserve target set by the International Monetary Fund (IMF) under a $ 1.5 billion, three-year loan program.