Rupee slightly firmer on state bank dollar sales

Thursday, 27 October 2016 00:00 - - {{hitsCtrl.values.hits}}

Reuters: The rupee ended slightly firmer on Wednesday in dull trading as dollar sales by a state bank surpassed importer demand for the U.S. currency, dealers said.

Dealers said moral suasion by the central bank continued to discourage trading in the spot currency market.

Rupee forwards were active, with the spot-next ending at 147.90/148.10 per dollar, compared with Tuesday’s close of 147.95/148.10.

The spot rupee was quoted at 146.90/95 per dollar, but there were hardly any trades.

“The rupee ended firmer due to a state bank dollar sales, but there is seasonal importer demand for the dollar,” a currency dealer said, asking not to be named.

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

Officials from the Central Bank were not available for comment.

Dealers also said foreign selling in Government securities also put pressure on the currency.

Foreign investors sold Rs. 8.79 b worth of Government securities in the week ended 19 October, data from the Central Bank showed.

Dealers said the market was waiting for some direction from the national budget due on 10 November.