Rupee forwards weaker on importer dollar demand

Tuesday, 18 November 2014 00:13 - - {{hitsCtrl.values.hits}}

Reuters: The rupee ended slightly weaker on Monday due to importer dollar demand, but moral suasion from the Central Bank prevented a further decline, dealers said. The Central Bank Governor said on Friday that the rupee was in an appreciating trend and the monetary authority would manage any volatility through intervention. However, dealers said the local currency was under pressure as imports continue to rise in a stable exchange rate regime and a low interest rate environment. The spot currency ended at 131.00/10 per dollar, weaker from Friday’s close of 130.95/131.10. Dealers said the central bank lowered the defending level by five cents to 131.00. Three-day forwards, or spot-next, also capped at 131.10, traded at 131.10/15 per dollar compared with Friday’s close of 131.10/12. The market expects the local currency to remain weak due to rising seasonal imports, at least through November and then start to inch up in December on remittances, dealers said. Overseas investors sold a net Rs. 39.54 billion ($ 302 million) worth of Government securities in the eight weeks through 12 November, data from the Central Bank showed.

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