Rupee firmer on bank, exporter dollar sales

Reuters: The rupee ended firmer on Thursday as banks and exporters sold dollars, but concerns over the currency’s further depreciation remained, while the stock market fell marginally in thin trade.

The rupee closed 121.10/30 a dollar, firmer than Tuesday’s close of 121.45/55, as banks sold greenbacks to cover short positions and exporters converted to rupees, dealers said.

Both the currency and stock markets were closed on Wednesday on account of the Poya holiday.

The rupee has fallen 5.7 per cent since 9 February, when the Central Bank stopped defending it. A Reuters monthly forex poll has forecast the rupee to fall as far as 128.50 by the end of August.

The stock market meanwhile edged down as many investors stayed away on concerns of slowing economic growth, rising interest rates and broadly flat December quarter profits.

The main share index fell 0.39 per cent or 21.16 points to hit 5,456.51.

The day’s turnover was Rs. 366.4 million ($ 3.02 million), lowest since 6 January and well below last year’s daily average of Rs. 2.3 billion. The day’s volume was 14.1 million, lowest since 9 January. Last year’s daily average was a record Rs. 102.7 million.

Foreign investors sold shares worth Rs. 8.1 million, but the offshore investors were net buyers of Rs. 2.72 billion so far this year, after a net outflow of Rs. 19.1 billion last year.

The Colombo Bourse is one of the worst performers this year among Asian markets, with a 10.17 per cent loss while the majority has had positive returns.