Rupee ends steady on bank dollar sales; importer demand weighs

Reuters: The rupee closed steady on Monday as late importer demand for the greenback offset dollar selling by a State-run bank in early trade, dealers said. One-week rupee forwards, which have been acting as a proxy for the spot rupee, ended steady at 146.20/40 per dollar.

The spot rupee is tightly managed by the Central Bank, and market participants use the forward market levels for guidance on the currency.

“The importer demand (for dollars) was there and a State bank sold dollars,” said a currency dealer, asking not to be named.

Central Bank officials were not available for comment.

Finance Minister Ravi Karunanayake on 12 July said the rupee would “obviously appreciate” on inflows from the country’s first sale of dual-tranche eurobonds, while the Central Bank Deputy Governor Nandalal Weerasinghe said last week that the $1.5 billion raised from the bond sale had been absorbed into foreign reserves.

The spot rupee was not traded on Monday.

Spot-next, which are rupee forwards settled three days after the spot rupee settlement, ended firmer at 145.95/146.05 per dollar, compared with Friday’s close of 146.00/20.