Rupee ends weaker on importer dollar demand

Reuters: The rupee closed slightly weaker on Monday as demand for the US currency from importers and banks surpassed the dollar conversions by exporters, dealers said.

The spot rupee ended at 153.80/85, compared with Friday’s close of 153.55/65

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

“The demand was there today and the remittance flow was slow,” 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 Central Bank, while announcing its key economic policies for the year in December, 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.