Rupee holds steady near record low

Reuters: The rupee ended steady on Thursday, holding near the record low hit in the previous session, as importer dollar demand was met by greenback sales by state banks, dealers said, while a top central bank official warned against market manipulation. 

The rupee hit a fresh all-time low of 157.90 per dollar on Wednesday, the sixth session in which the rupee has hit record lows out of seven since 23 April.

The rupee closed at 157.80/158.00 per dollar on Thursday, unchanged from Wednesday’s close.

It fell 0.9% last week and 1.5% in April.

“Two state banks sold dollars and we don’t know if they were selling on behalf of the central bank. The deputy governor’s comments could give some confidence to the market,” a currency dealer said.

The Central Bank on Friday said it would intervene to support the rupee when necessary and that there was no reason for the rupee to be under pressure given the country’s record $ 10 billion foreign currency reserves.

The rupee has weakened 2.7% 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. 288.6 million ($ 1.8 million) so far this year through 25 April, Central Bank data showed.