Rupee at over 5-wk high on inward remittances

Friday, 6 December 2013 00:00 - - {{hitsCtrl.values.hits}}

Reuters: The rupee ended a tad firmer on Thursday at a more than five-week high as strong inward remittances outpaced importer dollar demand early in the day with a State bank buying the greenback at 130.80 to prevent volatility, dealers said. The spot rupee LKR= ended at 130.80/85 rupees to a dollar, its highest close since 25 October and firmer from Wednesday’s close of 130.83/88. It has gained nearly 0.32% in five straight sessions. “Exporters are highly frustrated as the rates were coming down. We have seen a State bank buying at 130.80,” a currency dealer said. Dealers said there was importer dollar demand; a day after short-term interest rates fell to more than two-year lows. The island nation’s 91-day and 182-day Treasury bill yields fell to their lowest in more than two years at a weekly auction on Wednesday, Central Bank data showed, and currency dealers said traders bought dollars to import at cheaper interest rates. Central Bank Governor Ajith Nivard Cabraal said on Tuesday the rupee was expected to remain steady at the current levels with most inflows being remittances. Currency dealers still expect the rupee to face upward pressure due to continued remittances from expatriates for their families ahead of Christmas and the New Year. Cabraal had told Reuters last week that the Central Bank would intervene to keep the rupee stable if there was excess volatility after it hit a seven-week low on importer dollar demand despite intervention by State banks. The rupee has gained 3.34% since it hit a record low of 135.20 on 28 August.

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