Rupee down

Wednesday, 28 August 2013 00:43 - - {{hitsCtrl.values.hits}}

Reuters: The rupee fell to a more than one-year low against the dollar on Tuesday due to importer demand for the greenback amid renewed selling of government bonds by foreign investors.

The market expects the rupee to fall further with exporters holding onto dollars and foreign investors gradually exiting treasury bonds. Dealers said banks switched to one-day currency forwards in an inactive spot market. The spot rupee fell to 133.00 per dollar, its lowest since 19 July 2012, Thomson Reuters data showed. It had closed at 132.70 on Monday. The spot next or one-day forward closed at 132.10/20 per dollar, compared with Monday’s close of 132.80/90. “Importer dollar demand pushed the spot next down and the demand from foreign bondholders is also there,” a dealer said. The rupee fell 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 benchmark 10-year note yield is hovering around a two-year high at 2.7616%.