Rupee ends lower, pares gains on importer dollar demand
Tuesday, 4 November 2014 01:46
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Reuters: The rupee ended weaker Monday, surrendering early gains, as dollar demand from importers surpassed selling by exporters and remittances, dealers said.
The market expects the local currency to trade lower on rising imports and a stable exchange rate regime.
The spot currency, which traded during the latter half of the day, ended at 130.90/95 per dollar compared to Thursday’s close of 130.85/90. The spot did not trade Friday on moral suasion by the Central Bank.
Three-day forwards, or spot next, were actively traded in the absence of spots, closing at 130.95/131.00 compared with Friday’s close of 130.92/131.00.
“State banks were on the buying side and the spot started trading. The State banks were buying probably (to pay for) oil bills,” a currency dealer said.
The Central Bank prevented spot trades below 130.85 and forwards below 131.00 last week through moral suasion.
Overseas investors sold a net Rs. 36.2 billion ($276.9 million) worth of Government securities in the six weeks through 29 October, data from the Central Bank showed.
