Rupee gains slightly after Dr. PB’s comments

Friday, 25 July 2014 00:00 - - {{hitsCtrl.values.hits}}

Reuters: The rupee ended a tad firmer on Thursday as exporter dollar sales outpaced importer demand, a day after the Treasury Secretary said the rupee is maintained steady while the country builds up its foreign exchange reserves. The rupee ended at 130.23/25 per dollar, the highest close since 18 July and firmer than Wednesday’s close of 130.24/26. “The importer demand we have seen was not there and we have seen some exporter conversions,” said a currency dealer. Finance Secretary Dr. P.B. Jayasundera said late on Wednesday Sri Lanka is building up its foreign exchange reserves while keeping its currency stable as the island nation sees more dollar inflows. Speaking at a Foreign Correspondents’ Association forum, Jayasundera said the choice is to let the exchange rate appreciate and enjoy the short-term gain or let the exchange rate remains flexible within a reasonable level. “Technically speaking, you have the luxury to allow the exchange rate to appreciate. We don’t want that to happen,” said Jayasundera, the top technocrat in President Mahinda Rajapaksa’s Government. The Central Bank has absorbed more than $750 million so far this year, which Jayasundera attributed to a rise in inflows from exports, tourism and remittances. Dealers had been expecting the rupee to appreciate due to weak growth in imports and private sector credit, despite multi-year low interest rates. Private sector credit growth hit a more than 4-1/2 year low of 2.2% in May on the year, compared with 3.3% a month earlier. May imports fell 17.6% year to $1.28 billion.

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