Rupee steady

Tuesday, 10 September 2013 00:26 - - {{hitsCtrl.values.hits}}

Reuters: The rupee ended flat in dull trade on Monday despite downward pressure, supported by an earlier Central Bank directive not to trade the currency beyond a certain level, dealers said. The Central Bank had directed banks not to trade cash as well as one-day and two-day forwards beyond 133.00 per dollar and spot next or three-day forwards beyond 133.05. The rupee spot next, which was active in the market in the absence of spot trade, ended steady at 133.05/15 per dollar. “The rupee is flat on lack of importer demand and lack of exporter conversions,” a currency dealer said. Speaking at a roadshow in Hong Kong, central bank Governor Ajith Nivard Cabraal said the slight adjustment in the rupee was “due to the fact that there were many trading partners of Sri Lanka which have had major changes in their currencies”. “Our rupee has been generally stable, even in the phase of intense volatility in the past few weeks,” Cabraal told investors. Dealers said the rupee was steady as banks did not trade beyond the monetary authority’s earlier direction, though the Central Bank did not give any fresh directions on Monday. They said banks have adapted to the Central Bank’s direction through moral suasion. Last week, Cabraal said the rupee’s falling trend has reversed course and stabilised and moral suasion is in the Monetary Law Act as well as in almost every country’s central banking laws, and all central banks are expected to make use of such instruments. The rupee hit a record low of 135.20 to the dollar on 28 August, before recovering slightly. The rupee has fallen nearly 4% this year, after depreciating around 10% in 2012.

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