Rupee eases slightly on importer dollar demand

Reuters: The rupee ended marginally lower on Wednesday as dollar demand from importers slightly outpaced greenback sales by exporters, and as inward remittances continued ahead of the festival season, dealers said.

The rupee ended at 143.18/22 per dollar, compared with Tuesday’s close of 143.15/20.

“Rupee ended weaker on subdued importer (dollar) demand,” said a currency dealer, asking not to be named. “There was not much pressure on the rupee.”

The Central Bank conducted a repo auction on Tuesday, the second straight day since 27 February, to absorb excess rupee liquidity to ease the pressure on the exchange rate.

Inward remittances for the festival season starting mid-December would take some pressure off the local currency in the short term, dealers said.

Prime Minister Ranil Wickremesinghe last week warned of pressure on the currency due to a China-led global slowdown and a possible rate hike by the US Federal Reserve.

Commercial banks parked Rs. 89.343 billion ($ 624.12 million) of surplus liquidity on Wednesday using the Central Bank’s deposit facility at 6%, official data showed.