Rupee ends steady; rates decision awaited

Wednesday, 22 March 2017 00:03 - - {{hitsCtrl.values.hits}}

Reuters: The rupee closed steady on Tuesday as dollar demand from importers offset selling of the greenback by exporters late in the day, even as dealers said rising imports and selling of rupee bonds by foreign investors weighed on the currency.

Pressure on the rupee could ease if the country’s Central Bank announces a hike in key rates on Friday after a monetary policy board meeting late on Thursday, they said.

Rupee forwards were active, with two-week forwards ending at 152.40/45 per dollar, nearly unchanged from Monday’s close of 152.40/60.

“There was demand from local banks in the morning. We have seen some (dollar) selling in the latter part of the day,” said a currency dealer, asking not to be named.

The spot currency was quoted at 151.50/152.00 per dollar, but was not traded.

The country’s Central Bank raised the spot rupee reference rate by 25 cents to 151.60 on Monday, dealers said. It has been preventing spot rupee trades below 151.35 per dollar since 8 March, they said.

Central Bank officials were not available for comment.

Foreign investors net sold government securities worth Rs. 1.41 billion ($ 9.28 million) in the week ended 15 March, after two weeks of net inflows.

They have net sold Rs. 63.3 billion of such instruments so far this year.

The rupee has fallen 1.27% so far this year, and dealers say they expect the currency to weaken 6-8% in 2017. It lost 3.9% against the dollar last year.