Thursday, 30 January 2014 00:00
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Reuters: The rupee ended firmer on Wednesday, moving away from its near one-week low as exporters offloaded dollars in the absence of importers, dealers said.
The spot rupee ended at 130.72/82 per dollar, firmer from Tuesday’s close of 130.80/90, its lowest since 22 January.
Dealers said exporter dollar sales through banks and by corporates helped the rupee recover.
The rupee fell 0.2% in the previous two sessions because of bond outflows due to possibility of the US Federal Reserve further trimming its monetary stimulus and demand for the greenback from importers, despite dollar selling by a state bank to prevent the fall.
Central Bank Governor Ajith Nivard Cabraal said on Monday Sri Lanka should not experience any major capital outflows or market volatility in the event the US Federal Reserve scales back its stimulus more.
However, dealers said in the event of Fed cuts its stimulus further, it will have an impact on the local currency interest rates.
Dealers expect the rupee to fall in the absence of any intervention by the Central Bank due to importer dollar demand but expects the currency to trade between 130.50 and 131.50 in the near future.
The Central Bank last week said inflows of $1 billion from a recent sovereign bond sale would be kept in reserve, contrary to market expectations that a part of the bond proceeding would be allowed to be traded in the market.
The rupee has gained about 3.3% since it hit a record low of 135.20 on 28 August. It lost 2.5% in 2013.
