Rupee ends higher on exporter dollar sales

Reuters: The rupee ended higher on Thursday, a day after the local currency hit a record low, as greenback sales by exporters outpaced dollar demand from importers, dealers said.

The rupee which was traded at 156.12 per dollar in the early trade ended at 156.20/35, slightly firmer from Wednesday’s close of 156.30/40.

The rupee hit an all-time low of 156.50 intraday in the previous session.

“The rupee appreciated as there were some exporter (dollar) sales in the morning. We saw some demand in the latter part of the day,” a currency dealer said. Earlier this month, the country’s Central Bank Governor said if the inflation rate could be maintained between 4% and 5%, the depreciation in the rupee would be around 2% or 3%.

Dealers said they expected no impact from the $2.5 billion inflow anticipated later this week in two tranches of sovereign bonds, the country’s largest offering in history.

The Central Bank has bought around $400 million from the market in the first three months of this year to help build reserves and repay some debt.

The rupee has weakened 1.73% so far this year. It dropped 2.5% last year and 3.9% in 2016.  Dealers said they expect the rupee to gradually weaken and face higher volatility this year due to debt repayments by the Government.

Foreign investors sold Government securities worth a net Rs. 2.4 billion ($15.36 million) so far this year through 11 April, Central Bank data showed.