Rupee forwards end steady

Tuesday, 19 May 2015 01:34 - - {{hitsCtrl.values.hits}}

Reuters: Rupee forwards ended steady on Monday as the Central Bank’s moral suasion defended the local currency despite importer dollar demand, dealers said.

Actively traded two-month forwards ended at 135.35/50 per dollar compared with Friday’s close of 135.35/40. One-month forwards ended steady at 134.50/60 per dollar as the Central Bank prevented a sharp fall.

“There are import bills, but moral suasion prevented the fall,” said a currency dealer asking not to be named.

The Central Bank allowed the spot to appreciate to 133.30 on Friday, but dealers said the spot rupee did not trade on the day as the banking regulator used moral suasion to prevent deals below 133.30.

The Central Bank has been preventing high volatility and sharp movements in the currency through moral suasion since December. Central Bank officials were not available for comment.

The Central Bank let the spot currency rise 10 cents on Friday after allowing it to trade up 10 cents on Wednesday after having permitted the rupee to depreciate 60 cents in three calibrated steps since 30 April through Tuesday.

Some foreign investors in government securities were selling rupee-denominated bonds, dealers said. This could put pressure on the currency along with importer dollar demand.

Foreign investors sold Rs. 2.1 billion ($ 15.7 million) worth of government securities during the week ended 13 May, Central Bank data showed on Friday.

The rupee has depreciated 1.5% versus the US dollar this year up to 5 May, the Central Bank said on 8 May.