Rupee ends firmer on bank dollar sales

Friday, 23 September 2016 00:01 -     - {{hitsCtrl.values.hits}}

Reuters: The rupee ended higher on Thursday as dollar sales by a foreign bank helped currency forwards outpace importer dollar demand, but the market expects the rupee to be under downward pressure due to a rise in demand for imports, dealers said.

Rupee forwards were actively traded and one-week forwards ended at 146.45/65, firmer from Wednesday's close of 146.60/70.

The spot rupee was quoted at 145.90/146.60, but was not traded.

"The one-week forwards traded at 146.55 in early trade. But they appreciated due to dollar sales by a foreign bank, possibly from stocks- and bond-related inflows," a currency dealer said, asking not to be named.

Traders were unwilling to trade the spot rupee below 146.00, the level desired by the Central Bank, dealers said.

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

Officials from the Central Bank were not available for comment.

Another dealer said the market expects the local currency to be under downward pressure in the coming weeks.

"The usual seasonal importer demand is expected to pick up from now and will continue until mid-December."