Rupee edges up on exporter dollar sales; shares down

Reuters: The rupee edged up on Wednesday as dollar selling by exporters outpaced importer demand for the greenback ahead of the festive season in December, while moral suasion by the central bank prevented the local currency from falling, dealers said.

The spot rupee was quoted at 146.85 per dollar at 0627 GMT, but it was hardly traded for a fourth day running. It closed at 146.88/95 last Thursday.

The spot rupee is tightly managed by the Central Bank and market participants use the forward market levels for guidance on the currency.

Rupee forwards were active, with the spot-next at 147.05/12, edging up from the previous day’s close of 147.10/18.

“The spot rupee is not allowed trade below 145.90 and the spot next is not allowed below 147.15,” said a currency dealer asking not to be named.

“Exporter dollar sales helped the currency to gain though it is still under (downward) pressure.”

The Central Bank has been buying dollars from the market to accumulate reserves to meet targets set by the International Monetary Fund under a $ 1.5-billion loan deal, dealers said.

Officials at the Central Bank were not available for comment.

The rupee has been under pressure due to importer dollar demand, posting a 0.4% fall last week, following a 0.65% loss in the preceding week, Thomson Reuters data showed.

Sri Lankan shares were down, with the benchmark Colombo stock index 0.22% lower at 6,523.91 as of 0727 GMT. Turnover stood at Rs. 384.6 million ($ 2.63 million).