Rupee edges up on exporter dollar sales in late trade

Reuters: The rupee closed slightly firmer on Wednesday as exporters sold dollars in late trade, outweighing early demand for the U.S. currency from importers and banks, dealers said.

The spot rupee, which traded 154.00 per dollar during the day, ended at 153.75/95, compared with Tuesday’s close of 153.97/154.05.

“There was demand (for dollars). But we saw exporters coming in when the currency touched 154.00 per dollar,” said a currency dealer.

Dealers said the rupee might see volatility with the government’s heavy debt repayment this year.

Sri Lanka aims to raise $ 500 million this month via development bonds, the Central Bank said last week, as the government faces unprecedented debt repayment this year.

President Maithripala Sirisena’s administration must repay an estimated Rs. 1.97 trillion ($ 12.85 billion) in 2018 - a record high - including $ 2.9 billion of foreign loans, and a total of $ 5.36 billion of interest.

The currency fell 2.5% last year and 3.9% in 2016.

The Central Bank, while announcing its key economic policies for the year on 3 January, said it has allowed more flexibility in determining the exchange rate based on market conditions.