Rupee edges up on exporter dollar sales after rate decision
Saturday, 16 August 2014 00:31
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Reuters: The rupee rose against the dollar on Friday in dull trade as exporter sales of the greenback outpaced mild importer demand, dealers said, while bond yields gained in the secondary market after the Central Bank held key policy rates steady.
The rupee ended at 130.16/17 per dollar, slightly firmer from Thursday’s close of 130.16/19. It hit a two-week low of 130.26 per dollar on Wednesday.
Two State banks, through which the Central Bank usually intervenes in the market, bought dollars at 130.16 to prevent sharp gains and excessive volatility, dealers said.
“The dollar-rupee market was sluggish today but the bond market was very active,” said a currency dealer.
Dealers said yield on the five-year tenure bond was traded at 7.30/45%, 30 basis points (bps) higher than on Wednesday, after the Central Bank held key policy rates steady for the seventh straight month.
Yields on Treasury bills fell nine to 14 basis points at a weekly auction on Wednesday, with the one-year T-bill yield falling below the 6.50%, the rate at which the Central Bank mops up liquidity from commercial banks.
The rupee has risen half-a-percent this year despite heavy dollar buying by the Central Bank. This has led to lower market interest rates due to higher rupee liquidity.
