Rupee edges up on exporter dollar sales

Reuters: The rupee closed marginally firmer on Thursday, as dollar conversions by exporters outpaced importer demand for the US currency, dealers said.

The spot rupee closed at 153.65/75 per dollar, compared with Wednesday’s close of 153.70/75.

“Exporters are selling dollars to book forwards because premiums are high. There were petroleum and general imports. We see continuous exporter selling,” a currency dealer said, asking not to be named.

Though the rupee is under pressure, it may not fall as much as the market previously expected, dealers added.

The market had expected a 4% fall in the currency for 2017. The currency has lost 2.7% so far in the year. The market expects the currency to face pressure, with imports of more low-end vehicles on which the government has already reduced taxes.

The government imposed new taxes on high-end motor vehicles, telecoms, banks and liquor in a bid to boost revenues in its 2018 budget outlined on 9 November, as the budget deficit for the current year slipped to 5.2% of the GDP.

Foreign investors were net buyers of equities worth Rs. 18.5 billion ($ 120.4 million) this year as of Thursday’s close. They were net buyers of government securities worth Rs. 45.7 billion as of 15 November, official data showed.