Rupee slips

Wednesday, 14 August 2013 00:12 - - {{hitsCtrl.values.hits}}

Reuters: The rupee ended slightly weaker on Tuesday as importer dollar demand offset greenback sales by banks and exporters, but depreciation pressure on the currency remained in the absence of firm dollar inflows, dealers said. Some dealers said they have moved to one-day forwards instead of spot trade after the Central Bank’s earlier direction to banks not to accept bids above Rs. 131.60 per dollar. The one-day forward ended weaker at 131.66/72 per dollar from Monday’s close of 131.64/66. The rupee has fallen around 4% between 7 June and 18 July, after foreign investors started pulling out of Sri Lanka’s Treasury bonds due to a rise in US Treasury yields. The currency has been steady around 131.60 since 18 July as the Central Bank has not been allowing the spot dollar to be traded beyond 131.60 amid a rise in foreign holding in Government securities, dealers said. Dealers expect the rupee to move in a 131.50 to 132 range in the short term and continue to depreciate unless the Central Bank steps in or dollar inflows increase significantly.

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