Rupee ends little changed ahead of long weekend

Saturday, 5 August 2017 00:03 - - {{hitsCtrl.values.hits}}

Reuters - The rupee ended little changed on Friday, as mild importer demand for the dollar offset light greenback sales by banks in dull trade ahead of a long weekend, dealers said.

Analysts said the market shrugged off Thursday’s policy decision by the Central Bank as it was widely expected.

The spot rupee ended at 153.35/45 per dollar, compared with Thursday’s close of 153.30/45.

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“It was a quiet day. We haven’t seen much transactions. There was slight import demand, may be because of the long weekend,” a currency dealer said, requesting anonymity.

The Central Bank held its policy rates steady on Thursday and said past tightening are helping cool inflation and credit growth, signalling receding concerns about price pressure as it focuses on supporting an economy hit by extreme weather.

Central Bank Governor Indrajit Coomaraswamy on Thursday said the bank had expected to purchase $1.2 billion directly from the market between March and December.

Coomaraswamy had earlier said the rupee was still “over-valued”, and that the monetary authority was buying dollars to avoid any appreciation.

The banking regulator is compelled to buy dollars from the market to meet a reserves target set by the International Monetary Fund (IMF) under a $1.5 billion, three-year loan program.

Both stock and foreign exchange markets will remain closed on Monday for a Buddhist religious holiday.

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