Rupee closes at over 3-month high on inflows into stocks

Tuesday, 22 October 2013 00:37 - - {{hitsCtrl.values.hits}}

Reuters: The rupee edged up on Monday to a more than three-month high due to dollar inflows from foreign buying in top conglomerate John Keells Holdings PLC and in the absence of importer demand for the greenback, dealers said. The spot rupee ended at 130.95/131.00 per dollar, its highest close since 12 July and stronger from Thursday’s close of 131.00/10. Markets were closed on Friday for a holiday. Dealers said the rise was due to some dollar inflows from foreign buying in John Keells, which is raising $299 million through selling rights and warrants to fund an $850 million resort project. The deadline to raise the money is Friday. John Keells’ voting shares and rights were down 1.52% and 26.25% respectively, dragging the stock market down. Thin trading in large caps also contributed to the fall. Some dealers expect the currency could come under downward pressure after the Central Bank cut key policy interest rates to multi-year lows on Tuesday, just three weeks after the International Monetary Fund advised it to hold rates steady. Central Bank Governor Ajith Nivard Cabraal said the decision was taken after considering the stability in the exchange rate and a favourable inflation outlook in the near term. The rupee hit a record low of 135.20 on 28 August, but has managed to stem further losses since then.

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