Rupee ends firmer on bank dollar sales

Saturday, 12 August 2017 00:00 - - {{hitsCtrl.values.hits}}

Reuters - The rupee ended slightly firmer on Friday as banks and exporter dollar sales surpassed the mild importer demand for the U.S. currency, dealers said.

The spot rupee ended at 153.05/10 per dollar, compared with Thursday’s close of 153.10/20.

“Banks sold dollars mainly due to some remittance inflow and exporter sales. The state banks were not very active today and there was not much of (importer) demand also,” a currency dealer said, requesting anonymity.

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Dealers said the market sees gradual depreciation of the rupee and exporters have been reluctant to sell the dollar on speculation that the rupee would fall below 160 per dollar.

The Central Bank is targeting a more flexible exchange rate regime, the Government said in a document outlining its policies to the International Monetary Fund (IMF).

The Central Bank will aim to develop a deeper and more liquid foreign exchange market, adequate systems to review and manage exchange rate risks, and a transparent intervention policy, consistent with an inflation targeting regime, it said.

The Central Bank has intervened in the foreign exchange market since late February only to build up reserves or to stem excessive movements in the exchange rate, and will continue to do in the future as well, the document released by the IMF showed.

The banking regulator held its policy rates steady last week and said tightening measures are helping cool inflation and credit growth, signalling receding concerns about price pressure as it focuses on supporting an economy hit by extreme weather.