Rupee ends weaker on importer dlr demand; communal violence weighs

Wednesday, 7 March 2018 00:00 - - {{hitsCtrl.values.hits}}

Reuters: The rupee ended marginally weaker on Tuesday as importer dollar demand outpaced greenback selling by exporters and banks, but trading was dull due to worries over communal violence, dealers said.

The rupee closed at 155.05/15 per dollar, compared with Monday’s close of 154.95/155.00.

The rupee hit a record low of 155.90 per dollar on 14 February.

“Today the trading was dull as there were not much of import bills or remittance inflows as everybody is waiting to see the real impact of the state of emergency and violence,” said a dealer.

Indian Ocean island nation declared a nationwide state of emergency for 10 days on Tuesday to stop the Buddhist-Muslim violence from spreading.

The local currency has weakened 1.04% 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 ahead of the traditional New Year in April, dealers said.

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 a net Rs. 3.2 billion in the week ended 28 February, Central Bank data showed.

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