Friday, 22 November 2013 06:59
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Reuters: The rupee ended steady on Thursday as dealers were reluctant to trade the spot rupee above 131.10, a level seen desirable by the Central Bank, but currency forwards fell due to importer dollar demand, dealers said.
The spot rupee ended flat at 131.10/15 per dollar. It was shy of the 14 November close of 131.10/20, the lowest since 4 October.
While presenting the 2014 Budget, President Mahinda Rajapaksa, who is also the Finance Minister, said maintaining a flexible exchange rate regime along with productivity improvement is important to achieve the export revenue target of $20 billion in 2020.
Dealers and banks are wary of the budget impact on the rupee.
“This seems to be a pro-exporter policy. But in a Sri Lankan context, the flexibility means the rupee has to be depreciated,” a currency dealer said.
However, other dealers said there will be hardly any change in the Central Bank’s exchange rate policy as it is already under a flexible regime.
Dealers said spot nexts were active as banks were reluctant to trade the spot rupee above 131.10, the level seen desirable by the Central Bank.
Three-day forward or spot next, which was active in the market, was traded at 131.20/30 per dollar, weaker than Wednesday’s close of 131.13/18.
The rupee hit a record low of 135.20 on 28 August, but has managed to stem further losses and has gained 3.10% since then.
