Rupee ends weaker on importer dollar demand

Reuters - The rupee ended weaker on Friday as importer dollar demand and dividend payments outpaced inward remittances and dollar sales by exporters ahead of the festival session, dealers said.

Rupee forwards were active, with two-week forwards ending at 153.00/10 per dollar, compared with Thursday’s close of 152.60/70.

The Central Bank on Wednesday cut the spot rupee reference rate by 10 cents to 151.60, dealers said.

“There was some importer (dollar) demand and some dividend or royalty payments going through a couple of foreign banks,” said a currency dealer who did not wish to be named.

The rupee has been under pressure due to increased seasonal imports ahead of the traditional New Year later next week, although dealers expect the pressure to ease with seasonal inward remittances.

Outflows due to rupee bond sales by foreign investors have also been putting pressure on the currency.

Foreign investors net-sold government securities worth Rs. 950 million ($6.3 million) in the week that ended on 29 March. They have net sold Rs. 64.2 billion of such instruments so far this year.