Rupee up on exporter dollar sales; downward pressure remains
Saturday, 31 August 2013 00:00
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Reuters: The rupee ended firmer on Friday, moving further away from an all-time low on dollar sales by exporters, but was still under downward pressure, dealers said. The rupee spot next or one-day forward, which was active in the market in the absence of spot trade, closed at 133.00/10 compared with Thursday’s close of 133.40/60.
The rupee hit a record low of 135.20 per dollar on Wednesday, amid panic buying by importers, before the Central Bank Governor said the currency movement was an aberration. Spot rupee was quoted at 133.00, Thomson Reuters data showed.
However, dealers said, the rupee cannot be defended for a long time without strong dollar inflows.
The rupee has been falling since early July as foreign investors have pulled out of Sri Lanka’s Treasury bonds as US Treasury yields rose on expectations the Federal Reserve will soon begin to taper its massive bond buying program.
The rupee has fallen 5% since 7 June and nearly 4.1% so far this year, after depreciating by around 10% in 2012.
