Rupee steady

Friday, 7 February 2014 00:48 - - {{hitsCtrl.values.hits}}

Reuters: The rupee ended steady on Thursday as exporter dollar sales offset demand for the greenback from importers, but dealers expect the local currency to ease on lower interest rates that could drive credit growth and on expected seasonal imports next month. The spot rupee ended at 130.65/67 per dollar, little changed from Wednesday’s close of 130.65/75. “There was light trading today. Importer dollar demand was set off by inward remittances and exporter dollar sales,” a currency dealer said on condition of anonymity. “We expect the rupee to depreciate from next month due to seasonal dollar demand ahead of traditional new year in April.” Dealers also expect the currency to face downward pressure because of rising credit demand in a low-interest-rate regime. They said the Federal Reserve’s decision and the weekend US statement on bringing in another UN resolution against Sri Lanka will aggravate the fall. Dealers said the market was concerned about a possible gradual pull-out of foreign investors from Government securities and stocks, resulting in depreciation of the currency. Central Bank Governor Ajith Nivard Cabraal last week said Sri Lanka should not experience any major capital outflows or market volatility due to the Fed stimulus cut. The rupee has gained about 3.4% since it hit a record low of 135.20 on 28 August. It lost 2.5% in 2013.

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