Rupee edges up on late exporter dollar sales

Reuters: The rupee closed marginally firmer on Tuesday, offseting early losses as late dollar conversions by exporters surpassed demand for the US currency from importers and banks, dealers said.

The spot rupee ended at 153.75/80, compared with Monday’s close of 153.80/85. “Some exporters stepped in when the rupee hit 153.95 due to importer (dollar) demand,” said a currency dealer.

Pressure on the currency from imports is expected to prevail until the Central Bank sorts out new regulations for derivatives, which has slowed forward trading in the currency, dealers said.

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

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

It has intervened only to smoothen rupee volatility and to build up reserves, the banking regulator said.