Rupee steady; political uncertainty weighs

Saturday, 22 November 2014 00:00 - - {{hitsCtrl.values.hits}}

Reuters: Rupee forwards ended steady on Friday as moral suasion by the Central Bank helped to offset importer dollar demand amid political uncertainty weighing on the currency a day after the president declared snap polls. Just before the market closed on Friday, Health Minister Maithripala Sirisena resigned from the Government and said he would run as an Opposition presidential candidate in the election in January. Since the poll announcement six legislators have defected. Dealers said the rupee will likely remain weak due to political uncertainty and rising seasonal imports. The spot currency ended steady at 131.00 per dollar compared with Thursday’s close. Dealers said the Central Bank spoke with them to defend the local currency at 131.00. Central Bank officials were not immediately available for comment. Three-day forwards, or spot-next, were steady at 131.25/30 per dollar, compared to Thursday’s close. Dealers said the Central Bank capped the three-day forwards at 131.25. They said exporters and banks were reluctant to sell dollars on expectation the currency would weaken further. Overseas investors saw a net inflow of Rs. 457.8 million worth of Government securities week ended 19 November, but they have sold a net Rs. 39.1 billion ($ 298.47 million) in the eight weeks through 19 November, data from the Central Bank showed.

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