Tuesday, 24 September 2013 00:01
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Reuters: The rupee ended firmer on Monday as dollar sales by banks offset early demand for the greenback from importers, dealers said.
The rupee spot ended firmer at 132.05/10 compared with Friday’s close of 132.12/18.
“The sentiment is towards rupee appreciation but exporters are still not convinced to come in and sell. There was not much importer demand,” a currency dealer said.
Many dealers expect the rupee to be steady around the 132.00/25 level due to inflows from the National Savings Bank’s $750 million five-year bond issue.
Some dealers noted, however, that the rupee has a tendency to depreciate over the long term without steady dollar inflows from exports and remittances.
The currency hit a record low of 135.20 on 28 August, but has recovered since then. It has fallen 3.6% this year, after depreciating about 10% in 2012.
The rupee has been falling since early July when foreign investors started pulling out of local bonds as US Treasury yields rose in expectation of the US Federal Reserve cutting back its stimulus program.
Foreign holdings in Sri Lankan Government securities hit a more than six-month low last week after falling for four straight weeks.
The Central Bank did not publish foreign holdings data as of 18 September, which is supposed to be provided with the latest weekly indicators. However, an official at the Public Debt Department said they fell 5.47% in the four weeks ended 17 September to Rs. 475.92 billion ($ 3.60 billion), the lowest since 6 March.
Central Bank Governor Ajith Nivard Cabraal said earlier this month that foreign holdings in Government securities are still above the maximum 12.5% of the total outstanding T-bills and T-bonds that foreigners are allowed to hold.
