Rupee ends weaker on importer dollar demand

Reuters: The rupee ended weaker on Tuesday on dollar demand from importers in the absence of Central Bank intervention, dealers said.

Rupee forwards were active, with the spot-next ending at 147.25/35 per dollar, compared with its previous day close of 147.00/05.

The spot rupee was quoted at 146.90/95 per dollar, but hardly traded. It was steady last week after two weeks of losses.

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

“There was importer (dollar) demand and traders were reluctant to trade spot below 146.90 because the Central Bank prevented its trading below this level (last week). But Central Bank intervention was not seen today,” said a currency dealer, asking not to be named.

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 comments.

Dealers said they expected the rupee to remain under pressure due to seasonal imports.