Rupee at 4-week low; downward pressure remains

Friday, 8 November 2013 00:00 - - {{hitsCtrl.values.hits}}

Reuters: The rupee ended steady on Thursday hovering around a one-month closing low as year-end seasonal importer demand was offset by exporter dollar conversions. Dealers said they expect the currency to be under downward pressure due to continued importer dollar demand ahead of the December festive season.

The spot rupee ended at 131.10/15 per dollar, its lowest close since 8 October. It had closed at 131.07/15 on Wednesday. Dealers said there was moral suasion by the Central Bank to cap the rupee at 131.05 per dollar, but Central Bank Governor Ajith Nivard Cabraal told Reuters the bank had not imposed any limits in the rupee trading on Thursday. Trade in spot rupee was dull and importers and some foreign banks bought dollars through cash and rupee forwards, dealers said. Dealers said the rupee is under downward pressure due to year-end importer demand for the greenback until mid December and then could reverse the trend due to expected inflows from foreign remittances by Sri Lankan expatriates during the festive season. Cabraal on Friday said the rupee could come under pressure due to importer dollar demand, for consumer-related goods ahead of the December festival season, but the market could manage the demand “itself without much intervention”. The rupee hit a record low of 135.20 on 28 August, but has managed to stem further losses and is up 3.11% since then.