Rupee edges down on importer dollar demand

Reuters: The rupee ended marginally weaker on Thursday due to dollar demand from importers who fear the economic policies of US President-elect Donald Trump would lead to a rise in the greenback and interest rates.

Dealers said foreign investors might pull out of emerging markets, including from Sri Lanka, if the US Federal Reserve raises interest rates next month.

Minutes from the Fed’s 1-2 November meeting, released on Wednesday, showed policymakers were confident that a strengthening economy was enough to warrant interest rate increases soon. Rupee forwards were active on Thursday, with spot-next forwards closing at 148.65/75 per dollar, compared with Wednesday’s close of 148.50/60.

The spot rupee was hardly traded, but was quoted at 148.00/60.

The Central Bank revised the spot rupee reference rate to 147.95 per dollar last Friday, from 147.75.

“There were some (dollar) selling in the morning but it dried down by the latter part of the day and the demand was there,” said a currency dealer asking not to be named.