Rupee ends firmer on dollar selling by foreign banks

Reuters: The rupee ended firmer in thin trade on Monday as foreign banks sold the dollar, with importers staying away after an extended weekend to celebrate the traditional new year, dealers said.

Rupee forwards were active, with two-week forwards closing at 152.95/153.10 per dollar, compared with the previous Wednesday’s close of 153.50/60.

The country’s foreign exchange and stock markets were closed for the Sinhala-Tamil New Year holiday on Thursday and Friday.

“The market is still dull as a lot of corporates are not active after the New Year holidays. We see some dollar sales from foreign banks in the absence of importer dollar demand,” said a currency dealer who did not want to be named.

The dollar selling could be due to buying of local government securities or equities by foreign investors, other dealers said. Foreign investors have net bought Rs. 5.22 billion ($ 34.3 million) worth of equities in the last 16 consecutive sessions.

Foreign investors net bought government securities worth Rs. 1.87 billion ($ 12.32 million) in the week ended 12 April. They have however net sold Rs.  62 billion worth of such instruments so far this year.