Rupee peaks to 125.50 against the dollar before settling at Rs. 127

Saturday, 22 December 2012 00:14 -     - {{hitsCtrl.values.hits}}

Reuters: The rupee gained for a third straight session on Friday to its highest level against the dollar in more than seven months on exporter dollar conversions, while stocks ended weaker.

The rupee firmed 0.55 per cent to 126.90/127.00 to the dollar, its highest since 3 May, compared with Thursday’s close of 127.60/70, Reuters data showed.

“The lowest trade was done at 125.50 early but later importers bought dollars and booked forwards,” a dealer said.

Central Bank Governor Ajith Nivard Cabraal said on Thursday the rupee was likely to further appreciate due to continuous inflows in the absence of importer demand for dollars.

The Colombo Stock Exchange’s main index edged down 0.2 per cent or 10.87 points to close at 5,526.49.

Analysts said selling pressure due to year-end settlements dragged the Bourse down, but falling interest rates would help to attract investors towards risky assets in the new year.

Treasury bill yields eased between 21-27 basis points at a weekly auction on Wednesday in line with the Central Bank’s rate cut last week.,

Total turnover on Friday was Rs. 959.3 million ($ 7.51 million), higher than this year’s daily average of Rs. 891.9 million. Foreign investors were net buyers of Rs. 310.5 million worth of shares, extending net foreign buying this year to Rs. 37.78 billion.