Rupee ends steady; dollar conversions by exporters offset importer demand

Reuters: The rupee ended steady on Tuesday as dollar selling by exporters and banks offset importer demand for the US currency, dealers said.

The rupee closed unchanged at 154.85/95 per dollar. It hit a record low of 155.90 on 14 February.

“There was no big change as exporter (dollar) conversions offset (importer) demand,” said a dealer.

The local currency has weakened 0.9% so far this year, after declining 2.5% last year and 3.9% in 2016.

It is expected to be pressured by continued importer demand for dollars, dealers said.

A gradual depreciation in the rupee and higher volatility this year are expected on account of debt repayments by the government, dealers added.

The Government must repay an estimated Rs. 1.97 trillion ($ 12.68 billion) in 2018 - a record high - including $ 2.9 billion of foreign loans and a total of $ 5.36 billion in interest.

Foreign investors sold government securities worth net Rs. 3.7 billion in the week ended 21 February, Central Bank data showed.