Rupee edges down on importer dollar demand

Reuters: The rupee ended slightly weaker on Thursday due to dollar demand from importers, dealers said.

The rupee ended at 141.05/15 per dollar from Wednesday’s close of 141.00/05.

“Dealers were reluctant to sell above 141.05 as it was seen as the Central Bank’s desired level and we have seen a private bank selling dollars at 141.05,” a currency dealer said asking not to be named.

Dealers also said the rupee currency would gradually fall due to high import demand and less exporter conversions.

Analysts expect Finance Minister Ravi Karunanayake to increase import taxes when he presents the 2016 Budget scheduled on 20 November, to discourage shipments into the country.

Apart from imports, heavy Government spending is also putting pressure on the rupee, dealers said.

The rupee hit a record low of 141.40 per dollar on 28 September, but recovered slightly after a State-run bank sold dollars.

Commercial banks parked Rs. 65.05 billion ($461.4 million) of surplus liquidity on Thursday, using the Central Bank’s deposit facility, Central Bank data showed.