Rupee steady at 7-week low

Friday, 29 November 2013 00:01 - - {{hitsCtrl.values.hits}}

Reuters: The rupee ended unchanged on Thursday amid moral suasion by the Central Bank with the currency under downward pressure on importer dollar demand, dealers said.

Three dealers said banks did not trade the spot rupee beyond 131.20 per dollar as there was moral suasion by the Central Bank. The spot was kept steady at 131.10 for three weeks through Monday before it was allowed to be traded at 131.15. As the rupee spot was not actively traded, three-day forward or spot next was in focus. It ended steady at 131.30/35 per dollar. “There was heavy moral suasion and the rupee spot was protected at 131.20,” said a currency dealer. Central Bank Governor Ajith Nivard Cabraal on Wednesday told Reuters that the monetary authority will intervene to keep the currency stable when there is excess volatility after the rupee hit a seven-week low on importer dollar demand despite the intervention by State banks to hold the currency at 131.15. The spot rupee was quoted at 131.20/25 per dollar, firmer than Wednesday’s close of 131.20/35, at a seven-week closing low. Dealers said the currency will be under downward pressure because of continuing importer dollar demand, but will recover due to expected exporter conversions and foreign remittances ahead of Christmas. The rupee hit a record low of 135.20 on 28 August, but has managed to stem further losses and has gained 3.05% since then.