Rupee ends up on bank dollar sales

Reuters: The rupee ended firmer on Tuesday as dollar selling by a State-run bank surpassed importer demand for the greenback, dealers said.

One-week rupee forwards, which have been acting as a proxy for the spot rupee, ended at 146.10/30 per dollar compared with Monday’s close of 146.20/40.

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

“There was selling by a State bank. The demand (for dollars) is there, but dollar sales by a State bank helped the rupee to strengthen,” 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 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 Tuesday.

Spot-next, which are rupee forwards settled three days after the spot rupee settlement, ended little changed at 145.90/146.20 per dollar with compared to Monday’s close of 145.95/146.05.