Rupee ends weaker on importer dollar demand

Reuters: The rupee ended weaker on Friday as importer dollar demand surpassed inward remittances of the U.S. currency amid a lack of exporter conversions, dealers said.

The spot rupee ended at 145.25/35 per dollar, compared with Thursday’s close of 145.00/15. One-week forwards ended at 145.50/60, compared with the previous day’s close of 145.15/30. The spot rupee is usually managed by the central bank, and market participants use the forward market levels for guidance on the currency.

“The rupee ended weaker today as the importer (dollar) demand improved after the rupee strengthened,” a currency dealer said, asking not to be named.

The rupee strengthened 0.28% on Thursday on inward remittances ahead of Eid al-Adha. Muslims in Sri Lanka will celebrate Eid al-Adha on Monday.

Dealers said seasonal importer demand would pick up from mid-October.

Central Bank Governor Indrajith Coomaraswamy said last week that the currency was not under upward pressure as capital inflows had not been of sufficient magnitude to exert such pressure.

The central bank has largely not intervened to defend the rupee ever since a dual-tenure sovereign bond issue raised $1.5 billion in July.