Rupee edges up to 2-1/2 month high on exporter dollar sales

Saturday, 11 January 2014 07:55 - - {{hitsCtrl.values.hits}}

REUTERS: The rupee closed at its 2-1/2-month high on Friday as exporters sold dollars to minimise possible losses in the event of an appreciation in the local currency due to inflows from a $ 1 billion sovereign bond issue next week, dealers said. The spot rupee ended at Rs. 130.60/70 per dollar, its highest close since 24 October and up from Thursday’s close of Rs. 130.68/75. Currency dealers said sentiment was positive due to an expected $ 1 billion inflow next week from a bond issue. The rupee is likely to appreciate in the near term due to the inflows, dealers said, but gains would depend on whether the Central Bank wanted to buy the inflows to build up its reserves or increase dollar liquidity in the market. The Central Bank said on 2 January it expected the rupee to strengthen in the medium term and any direct intervention in the foreign exchange market would be minimum. The rupee has gained about 3.4% since it hit a record low of Rs. 135.20 on 28 August. It lost 2.5% in 2013.

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