Rupee ends down on importer dollar demand

Reuters: The rupee ended marginally lower on Thursday as importer dollar demand surpassed mild selling of the greenback by exporters, dealers said.

Dealers said the rupee was under pressure last week due to dollar demand from State-run Ceylon Petroleum Corp (CPC), which stocked up crude ahead of an expected fuel price hike.

The spot rupee ended at 153.62/68 per dollar, slightly weaker from Tuesday’s close of 153.60/65. The markets were closed for Diwali, the Hindu religious festival of lights, on Wednesday.

“There was demand today. It was the general importer demand,” said a currency dealer, who requested anonymity.

Crude prices are expected to rise in the country after private fuel retailer Lanka IOC informed local media it is likely to increase rates as they have been selling at a loss.

The rupee has been under pressure since January after the central bank stopped defending the currency and started buying the dollar to build the country’s depleted foreign currency reserves.

The island nation has seen Rs. 19.1 billion ($124.35 million) of net inflows into equities this year as of Thursday’s close and Rs. 33.8 billion into Government securities as of 11 October, official data showed.