Wednesday, 23 October 2013 00:00
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Reuters: The rupee rose on Tuesday to a more than three-month high due to dollar inflows into Government bonds and foreign buying in top conglomerate John Keells Holdings Plc in the absence of importer dollar demand.
The spot rupee closed at 130.80/90 per dollar, its highest close since 12 July, and firmer than Monday’s close of 130.95/131.00.
“There was no dollar demand from state banks and inflows were into shares and for a debenture issue,” a currency dealer said.
Dealers also said some inflows from foreign buying in John Keells for a second day also helped boost the currency. Keells is raising $299 million through selling rights and warrants to fund an $850 million resort project. The deadline to raise the money is Friday.
Some dealers expect the currency could come under downward pressure after the Central Bank cut key policy interest rates to multi-year lows last week.
Central Bank Governor Ajith Nivard Cabraal said the decision was taken after considering the stability in the exchange rate and a favourable inflation outlook in the near term. The rupee hit a record low of 135.20 on 28 August, but has managed to stem further losses since then.
