Decline of rupee, Bourse persists

Wednesday, 17 July 2013 00:14 - - {{hitsCtrl.values.hits}}

The rupee weakened Tuesday to a near 10-month low early on Tuesday due to importer demand for dollars and there was no Central Bank intervention, currency dealers said. The rupee was quoted at 131.35/45 to the dollar at 0505 GMT, its weakest level since 27 September and down from Monday’s close of 131.20/131.25, dealers said. “We haven’t seen any exporters in the market, not even a call from the exporters. There was some dollar demand from importers,” said a currency dealer. Currency traders said the rupee remained under pressure even though a Central Bank Deputy Governor, Ananda Silva, on Monday said this should ease with expected inflows into Government securities. Dealers said the Central Bank’s absence from the market indicated it is allowing some flexibility in the exchange rate. Exporters have been holding dollar earnings on hopes of further depreciation. The rupee fell 3.12% in June as foreign investors pulled out of treasury bonds due to a rise in US Treasury yields. Shares fell for the third straight session on Tuesday to their one-week low led by market heavyweight John Keells Holdings amid concerns over continued falling of the rupee currency. The main share index ended down 0.13% at 6,007.65, its lowest since 9 July. Conglomerate John Keells Holdings fell 0.6% to Rs. 247.10. The index hit a near 10-week low on 9 July on concerns over the rupee’s weakening trend and possible foreign outflows. The local currency weakened to a near 10-month low early on Tuesday due to importer demand for dollar and there was no Central Bank intervention. Turnover on Tuesday was Rs. 737.8 million ($ 5.63 million), provisional data showed, which was less than this year’s daily average of about Rs. 970 million.

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