Rupee ends stronger on local bank dollar sales

Reuters: The rupee closed firmer on Thursday as dollar inflows from equity-related transactions outpaced mild importer dollar demand, dealers said.

Rupee forwards were active, with two-week forwards closing at 153.10/25 per dollar, compared with Wednesday’s close of 153.40/50.

“We see some inflows from stock market-related transaction. Local banks are selling dollars,” said a currency dealer who requested anonymity.

The island nation has received dollar inflows since the beginning of April, with foreign investors buying equities and Government securities.

Foreign investors have bought equities worth a net Rs. 10.42 billion in the last 20 straight sessions, taking the year-to-date net foreign inflow into equities to Rs. 12.9 billion. They net bought Rs. 697.5 million worth equities on Thursday. They also net bought Government securities worth Rs. 1.87 billion in the week ended 12 April. However, they have net sold Rs. 62 billion worth of Government bonds so far this year.

The market has not been impacted much after the Central Bank increased policy rates by 25 basis points last month, dealers said.