Rupee firmer on dollar sales by exporters, banks

Friday, 17 January 2014 00:08 - - {{hitsCtrl.values.hits}}

Reuters: The rupee ended firmer on Thursday as dollar sales by exporters and banks outpaced importer demand for the greenback, with the market expecting the rupee to strengthen further in the near future. Some dealers said investor sentiment on the currency was positive because of expected inflows from a $1 billion sovereign bond issue either on Thursday or Friday. The spot rupee ended stronger at 130.60/67 per dollar from Monday’s close of 130.68/73. Both the currency and stock markets were closed on Tuesday and Wednesday for public holidays. “There has been a constant flow of dollars by exporters. Importer dollar demand filled up pretty well and oil bills were not there. That also helped to strengthen the rupee,” said a dealer. The rupee is likely to appreciate in the near term due to inflows from the bond issue, dealers said. However, gains would depend on whether the Central Bank wants 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 3.5% since it hit a record low of 135.20 on 28 August. It lost 2.5% in 2013.

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