Rupee firmer near 1-week high; downward pressure remains

Thursday, 24 July 2014 00:00 - - {{hitsCtrl.values.hits}}

Reuters: The rupee ended firmer on Wednesday near its one-week high, as exporter dollar sales surpassed early importer demand for the greenback, but dealers expect the rupee to face some downward pressure during the week due to import bills. The rupee ended at 130.24/26 per dollar, its highest close since 18 July and firmer from Tuesday’s close of 130.27/29. Early last week, it hit a more than one-year closing high. Dealers said they did not see any impact on the rupee due to $307 million in outflows from Government securities a week earlier. The Central Bank also said this would not affect the rupee. Dealers said though the $307 million has been shown as outflows, foreign investors have not taken the funds out of the country. A currency dealer at a foreign bank, which usually deals with foreign trading in Government securities, on Monday said the country could also see similar amount of inflows in the near future. He did not elaborate. The central bank last week said the rupee would have appreciated to around 125 rupees per dollar had it not intervened by absorbing $750 million from the domestic foreign exchange market this year through 14 July. Dealers had been expecting the rupee to appreciate due to lack of strong growth in imports and private sector credit, despite lower interest rates. Yields on Treasury bills edged down further at a weekly auction on Wednesday.

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