Rupee edges up on inward remittances

Reuters: The rupee ended slightly firmer on Friday as dollar inflows due to inward remittances surpassed importer demand for the U.S. currency, dealers said.

The spot rupee ended at 153.73/78 per dollar, up marginally from Thursday’s close of 153.75/80.

“The State (banks’) demand was there. But with the month end, there were inward remittances,” a currency dealer said, requesting anonymity.

Last week, central bank Governor Indrajith Coomaraswamy said the rupee was still “over-valued” and that the monetary authority was buying dollars to avoid any appreciation. The banking regulator is compelled to buy dollars from the market to meet a reserves target set by the International Monetary Fund (IMF) under a $1.5 billion, three-year loan programme.

Analysts said a port deal approved by the Cabinet earlier this week helped boost sentiment.

Sri Lanka will finally sign a $1.1 billion deal on Saturday to lease the southern Hambantota port to China, after several months of delay caused by local protests and claims by opposing politicians that this would threaten national security.