Rupee ends weaker on importer dollar demand

Reuters: The rupee ended weaker on Tuesday as dollar demand from importers weighed on the spot currency, which traded for a second straight session after six weeks.

The spot rupee started trading on Monday for the first time since 5 May when the Central Bank fixed the spot reference rate at 152.50.

The spot rupee ended at 153.30/40 per dollar, weaker from Monday’s close of 153.18/23.

“There was some (dollar) buying, but not large volumes. There was general importer demand,” said a currency dealer, requesting anonymity.

Dealers said they expect seasonal demand for dollars to pick up from August.

The Central Bank has set a target of $ 1.2 billion in direct market purchases of dollars to boost the island nation’s reserves this year, mainly to achieve a target set by the International Monetary Fund in return for a three-year $ 1.5 billion loan. 

Foreign investors bought a net Rs. 7.93 billion ($ 51.8 million) worth of government securities in the week ended 14 June. They have sold a net Rs. 32.03 billion worth of government bonds so far this year.