Rupee ends steady as dollar remittances offset demand

Reuters: The rupee closed steady on Monday as dollar inflows through inward remittances and exporter greenback sales offset the importer demand for the US currency, dealers said.

The spot rupee ended at 153.55/60 per dollar, compared with Thursday’s close of 153.55/65.

Currency, bond, and stock markets were closed on Friday for a public holiday.

“There were sizeable (dollar) conversions. We have seen some inward remittances and dollar inflows due to salaries,” said a currency dealer, adding that the dollar demand had slightly waned, supporting the rupee.

The rupee has lost 2.6% so far this year. The currency is expected to face pressure with imports of more low-end vehicles on which the Government has cut taxes, dealers have said.

The market has been waiting for more clarity over a foreign exchange management act introduced by the Government last month.

Central Bank Governor Indrajit Coomaraswamy said the new act would decriminalise offences related to foreign exchange trading and impose fines instead.

The Government imposed new taxes on high-end vehicles, telecoms, banks and liquor in a bid to boost revenues in its 2018 Budget presented earlier this month.

Foreign investors bought equities net worth Rs. 18.7 billion ($ 121.8 million) this year, as of Monday’s close. They bought Government securities net worth Rs. 49.2 billion as of 29 November, official data showed.