Rupee edges lower on importer dollar demand

Reuters: The rupee edged down on Monday due to mild importer dollar demand, dealers said, adding downward pressure on the local currency would likely ease due to expected inflows in the near future.

A loan deal with the IMF and a likely $1.5-billion bond issue in the short term have helped build confidence in the currency, they added.

The spot rupee reference rate stood at 145.70, the dealers said.

The banking regulator had fixed the spot trading rate at 143.90 per dollar until 2 May, they said, although Central Bank officials were not available to comment on whether it had intervened in the forex market.

“There was some import demand (for dollars),” a currency dealer said, asking not to be named.

Trading in the spot currency has been intermittent since 27 January and it was barely bid on Monday as well, but some movement in short-term dollar/rupee forwards indicated the rupee was trading weaker.

The spot next dollar/rupee forwards ended at 146.15/20 per dollar, compared with Friday’s close of 146.10/20 per dollar.

The spot next, which acts as a proxy for the spot currency, indicates the exchange rate for the day following the conventional spot settlement and was three days ahead for Monday’s trade.