Rupee at near 10-month low on importer demand for dollars

Tuesday, 16 July 2013 01:46 - - {{hitsCtrl.values.hits}}

Reuters: The rupee fell 0.34% on Monday, hit by demand for the dollar from importers, currency dealers said, but a top Central Bank official said the pressure on the currency was expected to ease on fund inflows after a June sell-off in June. The rupee closed at 131.20/25 to the dollar, its lowest since 25 September and weaker than Friday’s close of 130.95/131.00. Dealers said that the Central Bank sold some dollars to accommodate foreign selling in Sri Lanka’s Treasury bonds. A Central Bank official said there was “no direct intervention” in the foreign exchange market, but that there was an “off the market intervention” to facilitate the bond sale. The Central Bank’s latest data showed foreign investors have bought a net Rs. 5.15 billion ($ 39.34 million) in Government securities in the week ended 10 June, reversing the trend of net foreign outflows in the previous three weeks. Ananda Silva, the Central Bank’s Deputy Governor, said that the Bank “expects some more inflows into Government securities” and “expects the pressure on the rupee to ease.” The rupee fell 3.1% in June as foreign investors pulled out of Sri Lankan Treasury bonds, lured by a rise in US treasury yields on concerns the Federal Reserve would soon start trimming its stimulus program.

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