Saturday, 8 November 2014 00:27
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Reuters: The rupee ended steady on Friday as banks were reluctant to trade below the Central Bank’s desired level despite importer dollar demand, dealers said.
Traders said the local currency may face pressure as imports continue to rise in a stable exchange rate regime.
The spot currency ended flat at 130.90/131.00 per dollar. Dealers said they were reluctant to trade the spot below 130.90 due to moral suasion by the Central Bank.
Both the stock and rupee markets were closed for a Poya on Thursday.
Three-day forwards, or spot next, which were actively traded because of moral suasion on the spot rupee, ended at 131.00/131.10 per dollar, compared to Wednesday’s close of 131.00/05. Dealers said the Central Bank capped the spot next at 131.00.
“There was importer demand for dollars,” a dealer said on condition of anonymity. “The spot is not allowed to trade below 130.90 and the spot next below 131.00.”
Central bank officials were not available for comment.
The market expects the local currency to remain weak due to rising seasonal imports at least through November and only start to inch up in December on remittances, dealers said.
Overseas investors sold a net Rs. 39.12 billion ($ 298.97 million) worth of government securities in the seven weeks through 5 November, data from the Central Bank showed.
