Rupee hits record low on importer dollar demand

Reuters: The rupee hit a record low on Friday as importer dollar demand surpassed the greenback sales from a bank, currency dealers said.

The Central Bank, however, prevented the currency from falling further by restricting trades below 142.00 per dollar, dealers said. Central Bank officials were not available for comment.

The currency fell 0.25% during the day to hit an all-time low of 142.25, dealers said, surpassing its previous record low of 142 hit on Monday.

The currency, however, ended at 142.00/05 per dollar, edging down from Thursday’s close of 141.99/142.05.

“There was importer (dollar) demand but in the latter part of the day a private bank sold dollars and eased the pressure,” said a currency dealer asking not to be named.

Dealers said importers have been booking forwards as they are not sure of the Budget while exporters are quietly selling in low volumes on expectation the currency will trade around current levels until some clarity emerges from the 2016 Budget.

Commercial banks parked Rs. 134.87 billion ($950.12 million) of surplus liquidity on Friday, using the central bank’s deposit facility at 6%, official data showed.

The central bank also injected a net Rs. 26.4 billion on Friday, data showed, which currency dealers attributed to the purchase of Government securities.