Rupee forwards end up on exporter dollar sales

Thursday, 2 October 2014 00:58 - - {{hitsCtrl.values.hits}}

Reuters: Rupee forwards recovered on Wednesday due to exporter dollar sales after falling in early trade due to equity-related outflows and importer dollar demand, dealers said. Moral suasion by the Central Bank capped any sharp fall in the local currency below 130.50, dealers said. The spot currency was not quoted on Wednesday. It was quoted at 130.80 per dollar at the close on Tuesday. “Exporter dollar conversions came in and the rupee ended firmer,” a currency dealer said, adding that the rupee forwards picked up in the absence of effective spot trade. Three-day rupee forwards or spot next touched a low of 131.05 per dollar before recovering to close at 130.60/70, higher from Tuesday’s 130.75/95, dealers said. Dealers said the spot next was also capped at 130.90 through moral suasion after it fell below 131.00. Equity-related outflows weighed on the currency after the stock market saw foreign selling worth Rs. 4.4 billion ($33.7 million) in the last three sessions through Tuesday. Currency dealers expect the rupee to weaken on the back of sustained foreign selling in Government securities and higher imports in a low interest rates regime. Dealers said concerns over lower returns following the Central Bank’s decision to limit bank deposits under its repo window have prompted some foreign investors to gradually pare their stakes in Government securities. They cited lower optimism for the currency’s outlook after the Central Bank’s decision last week to limit commercial banks’ access to the standing deposit facility.

Rupee on spot and spot next contracts appreciates considerably

Forex markets yesterday, the USD/LKR rate on spot and spot next contracts appreciated considerably to close the day at Rs. 130.50/70 and Rs. 130.60/75 respectively. Wealth Trust Securities said the total USD/LKR traded volume for 30 September was at $ 37.71 million. Some of the forward dollar rates that prevailed in the market were one month – 130.95; three months – 131.53 and six months – 132.35.