Rupee edges up on State bank’s dollar sales

Reuters: The spot rupee continued its recovery against the dollar on Monday from last week’s record lows as a State bank, through which the Central Bank usually directs the market, offered dollars at Rs. 133.90, dealers said.

The bank had lowered its dollar selling rate by 20 cents to 134.20 on Thursday and raised it by 10 cents to 134.10 on Friday.

The rupee ended 0.15% firmer on Monday at 133.90 compared with Friday’s close of 134.10. It hit a record low of 134.20 on Thursday.

“The State bank offered ample dollars at 133.90 and it was a dull market,” said a currency dealer asking not to be named. “But the bond market was very active with foreigners seen selling bonds.”

Dealers see downward pressure on the rupee due to a strengthening of the dollar as foreign investors exit from government securities due to expectations of an earlier rate hike by the Federal Reserve and political uncertainty in Sri Lanka ahead of Parliamentary elections.

Central Bank officials were not immediately available for comment.

President Maithripala Sirisena’s Government has said it will dissolve Parliament once some crucial reforms, including an electoral bill, are passed, but is yet to fix a date for the election.