Rupee edges up on exporter dollar sales

Saturday, 26 April 2014 01:22 -     - {{hitsCtrl.values.hits}}

Reuters: The rupee ended a tad firmer on Friday as exporter dollar sales outpaced light importer demand for the greenback, while dealers expected the currency to remain stable in the near-term in the absence of a pick-up in private sector credit. The spot rupee ended at 130.58/61 per dollar, firmer from Thursday’s close of 130.61/63. “There was some bank dollar selling. It is from the exporter dollar conversions and there was not much of import demand,” said a currency dealer. Many dealers said they were surprised by the lower credit demand from the private sector even though key interest rates have been at multi-year lows since January. The benchmark 91-day Treasury bill yield further dropped to its lowest since January 2007, data showed on Wednesday, a day after the Central Bank kept policy rates steady at multi-year lows. Private sector credit grew 4.4% year-on-year in February, the slowest since May 2010, latest data from the Central Bank showed. That compared with growth of 5.2% in January this year and 13.3% in February 2013. The Central Bank, in its monetary policy statement on Tuesday, expressed confidence that private sector credit growth would rebound in the second quarter and push up the pace of economic expansion. Dealers expect the rupee to trade in a range of 130.60-70 in the near future until credit growth picks up. It has been hovering between 130.55 and 130.70 since 3 March, Thomson Reuters data showed, with the central bank intervening to smoothen any sharp volatility.