Reuters: The rupee fell on Wednesday on importer dollar demand, with currency forwards active in the absence of trading in the spot currency, dealers said, a day after moral suasion by the Central Bank capped the rupee’s fall.
Traders were unwilling to trade the spot rupee below 146.00, a level deemed desirable by the Central Bank, dealers said.
Officials from the Central Bank were not available for comment.
The Central Bank has largely not intervened to defend the rupee ever since a dual-tenure sovereign bond issue raised $ 1.5 billion in July.
The spot rupee was quoted at 145.90/146.50 per dollar but was not traded. It closed at 145.90/146.30 on Tuesday.
“The spot rupee has not been trading because of the fears of the Central Bank’s moral suasion, but forwards were actively traded,” a currency dealer said asking not to be named.
The actively traded spot-next rupee forwards ended at 146.45/55 per dollar, compared with the previous close of 146.20/30.
“This means the implied spot rate is 146.35/45,” the dealer said.
The spot rupee is usually managed by the Central Bank and market participants use the forward market levels for guidance on the currency.