Rupee ends lower on importer dollar demand

Reuters: The rupee ended marginally lower on Friday as importer dollar demand surpassed greenback sales by exporters and banks while expectations of a rise in imports pressured the local currency, dealers said.

The spot rupee, which has been trading for the ninth straight session after being inactive for six weeks, ended at 153.55/65 per dollar, almost unchanged from Thursday’s close of 153.50/60.

The spot rupee resumed trading on 19 June for the first time since 5 May when the Central Bank fixed its reference rate at 152.50.

“There was demand from importers,” said a currency dealer, requesting anonymity.

Dealers said they expected seasonal demand for the dollar to pick up from August.

Rupee has been under pressure since early this year after the central bank stopped defending the currency while the island nation faces a balance of payments crisis.

The Central Bank is also compelled to buy dollars from the market to meet the reserve target set by the International Monetary Fund (IMF) under a $ 1.5 billion, three-year loan program.