Five-day rupee forwards end weaker on dollar demand

Reuters: Five-day rupee forwards ended weaker on Monday as importer dollar demand surpassed greenback sales by exporters, while dollar sales by a State bank limited the fall, dealers said.

The forwards, known as spot next and which acts as a proxy for the spot currency, ended at 145.85/146.00 per dollar weaker from Friday’s close of 145.20/40.

“Rupee ended weaker on lack of liquidity. There were no conversions from remittances and exporters; but the moderate demand (for dollars) is still there,” said a currency dealer requesting not to be named.

“A State bank was seen selling dollars to select trades at 145.40 to 145.15, which prevented the fall,” he added.

The spot rupee, which barely witnessed any trading since 27 January, was not actively traded on Monday as well.

Dealers say an anticipated IMF loan, a tax hike, and less borrowing will help stabilise the currency. 

Sri Lanka will stop excess Government borrowing in a bid to get out of a debt trap, and it hopes for cheaper loans after a deal with the IMF is finalised, said Central Bank Governor Arjuna Mahendran, last Tuesday.