Rupee edges down on importer dollar demand

Reuters: The rupee closed marginally lower on Wednesday as importer dollar demand surpassed greenback sales by foreign banks, dealers said.

The rupee has been under pressure due to rising imports and net selling of government securities by foreign investors, they added.

Rupee forwards were active, with two-week forwards closing at 150.55/65 per dollar, slightly weaker from Tuesday’s close of 150.45/55.

“We saw thin trading and there were some deals in one-week forwards, which ended at 150.35/45,” a currency dealer said, asking not to be named.

One-week forwards were not actively traded since 30 December.

Last week, the central bank’s moral suasion prevented further decline even as the monetary authority signalled a change in its intervention policy.

Officials from the central bank were not available for comments.

Central Bank Governor Indrajit Coomaraswamy said last week that defending the rupee with foreign exchange reserves “doesn’t seem sensible” as it has always been followed by a sharp depreciation in the currency.

The spot rupee was also hardly traded, dealers said.