Rupee steady; late importer dollar demand offsets exporter sales

Reuters: The rupee ended steady in dull trade on Tuesday as late importer dollar demand erased the early gains from inward remittances and exporter greenback sales ahead of the festival season, dealers said.

Rupee forwards were active, with two-week forwards ending steady at 152.40/50 per dollar.

“There was some importer demand latter part of the day. Dollar conversions are happening as these are the last few days to pay bonuses and salaries before the New Year. So, exporters are converting. We can see some inward remittances too,” said a currency dealer who did not wish to be named.

The rupee has been under pressure due to dollar demand to meet increased seasonal imports ahead of the traditional New Year that is celebrated on 13-14 April, dealers said.

The Central Bank raised the spot rupee reference rate by 10 cents to 151.70 on 27 March. It had raised the reference rate by 25 cents on 20 March.

The Central Bank raised interest rates for the first time in eight months on 24 March, saying tighter policy was a precaution against a build-up of inflationary pressures.

Analysts said the rate hike, a move that was also aimed at easing pressure on the rupee, could help stabilise the domestic currency that has been hurt by rising imports and outflows due to rupee bond sales by foreign investors.

Foreign investors net sold Government securities worth Rs. 950 million ($ 6.26 million) in the week ended 29 March. They have net sold Rs. 64.2 billion of such instruments so far this year.

Rupee steady; late importer dollar demand offsets exporter sales

Reuters: The rupee ended steady in dull trade on Tuesday as late importer dollar demand erased the early gains from inward remittances and exporter greenback sales ahead of the festival season, dealers said.

Rupee forwards were active, with two-week forwards ending steady at 152.40/50 per dollar.

“There was some importer demand latter part of the day. Dollar conversions are happening as these are the last few days to pay bonuses and salaries before the New Year. So, exporters are converting. We can see some inward remittances too,” said a currency dealer who did not wish to be named.

The rupee has been under pressure due to dollar demand to meet increased seasonal imports ahead of the traditional New Year that is celebrated on 13-14 April, dealers said.

The Central Bank raised the spot rupee reference rate by 10 cents to 151.70 on 27 March. It had raised the reference rate by 25 cents on 20 March.

The Central Bank raised interest rates for the first time in eight months on 24 March, saying tighter policy was a precaution against a build-up of inflationary pressures.

Analysts said the rate hike, a move that was also aimed at easing pressure on the rupee, could help stabilise the domestic currency that has been hurt by rising imports and outflows due to rupee bond sales by foreign investors.

Foreign investors net sold Government securities worth Rs. 950 million ($ 6.26 million) in the week ended 29 March. They have net sold Rs. 64.2 billion of such instruments so far this year.