Rupee firms up

Tuesday, 1 October 2013 01:18 -     - {{hitsCtrl.values.hits}}

Reuters: The rupee ended slightly firmer on Monday due to dollar sales by exporters and banks after a Central Bank directive asking banks not to trade above 132.00 per dollar prevented falls in early trade, dealers said. The spot next or three-day forward, which was active in the market, was quoted at 132.03/05 per dollar compared with Friday’s close of 132.10/15 per dollar. “The exporter and bank dollar selling offset the early importer demand,” said a currency dealer who declined to be named. The rupee spot, which was not actively trade due to the Central Bank’s previous directive asking banks not to trade spot beyond 132.00, ended at 132.00/132.05, compared with Friday’s close of 131.90/132.10. The International Monetary Fund last week urged the central bank to limit its intervention in the rupee exchange rate “to dealing with excessive short term volatility”. The currency hit a record low of 135.20 on 28 August, but has managed to stem further losses since then. It has fallen 3.3% this year, after depreciating about 10 percent in 2012. The rupee has been falling since early July when foreign investors started pulling out of local bonds as US Treasury yields rose in anticipation of the Federal Reserve’s tapering of its stimulus. But the Fed stuck to its $85 billion-a-month bond-buying program at its policy review on 18 September, helping to steady the rupee and other risk-sensitive currencies globally.