Rupee ends steady on late exporter, bank dollar sales

Reuters: The rupee ended steady on Wednesday as late dollar sales by exporters and banks offset importer demand for greenbacks, while expectations that imports would increase also weighed on the local currency, dealers said.

The spot rupee was traded as low as 153.77 during the day, but ended at 153.63/73 per dollar, hardly changed from Tuesday’s close of 153.63/70.

The spot rupee resumed trading on 19 June for the first time since 5 May, when the Central Bank had fixed its reference rate at 152.50.

“The pressure is still there for the rupee to weaken with the import demand. But we saw some (inward) remittances and exporter dollar sales in the latter part of the day,” said a currency dealer, requesting anonymity.

“There is construction-related import demand.”

Dealers said they expected seasonal demand for dollars to pick up from August.

The rupee has been under pressure since early this year after the Central Bank stopped defending the currency at a time when the island nation faces a balance of payments crisis.

The Central Bank is also compelled to buy dollars from the market to meet the reserve target set by the International Monetary Fund (IMF) under a $ 1.5 billion, three-year loan program.