Rupee down on importer dollar demand

Reuters: The rupee ended weaker on Friday due to dollar demand from importers but moral suasion by the Central Bank discouraged trading in the spot currency market, dealers said.

Rupee forwards were active, with the spot-next ending at 147.95/148.05 per dollar, weaker than its previous close of 147.60/70.

The spot rupee was quoted at 146.90/95 per dollar, but there were hardly any trades.

“We see the Central Bank’s instruction on the spot rupee. But the spot-next was traded without any intervention,” a currency dealer said, asking not to be named.

The spot rupee is usually managed by the central bank, and market participants use the forward market levels for guidance on the currency.

Officials from the Central Bank were not available for comment.

Another dealer said foreign selling in government securities also put pressure on the currency.

Foreign investors sold Rs. 8.79 billion ($ 59.84 million) worth of government securities in the week ended 19 October, data from the Central Bank showed.

Dealers said the market was waiting for some direction from the national budget due on 10 November.