5-day rupee forwards edge down on importer dollar demand

Reuters: Five-day rupee forwards ended slightly weaker on Friday on importer dollar demand even as a State-run bank sold the greenback and the Central Bank intervened in the market via moral suasion to prevent further falls, dealers said.

The five-day forwards, which are known as spot next and act as a proxy for the spot currency, ended at 146.50/60 per dollar compared with Wednesday’s close of 146.30/60. Markets were closed on Thursday for a holiday.

“A State bank sold dollars at up to 145.70 levels and there was moral suasion by the Central Bank, as well. But the rupee still ended at 146.50/60,” said a currency dealer, asking not to be named.

Central Bank officials were not immediately available for comment.

Central Bank Governor Arjuna Mahendran said last week the monetary authority has been intervening to smoothen volatility in an illiquid market.

The spot rupee, which has barely seen any trading since 27 January, was not actively traded on Friday as well.

The rupee has been under pressure as foreign investors have sold Government securities amid the country’s economic woes, but they have net bought bonds worth Rs. 8.84 billion ($60.42 million) in the last three weeks, Central Bank data showed.