Rupee recovers on remittances, exporter dollar sales
Friday, 27 June 2014 03:26
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Reuters: The rupee pulled back from early losses on Thursday due to inflows from remittances and exporter conversions, outpacing the importer dollar demand early in the session, dealers said.
The rupee ended at 130.28/30 per dollar, up from Wednesday’s close of 130.34/38, which was its lowest since 2 June. “There were inflows from remittances and exporter dollar sales. The state bank also stopped buying dollars for imports,” a currency dealer said, asking not to be named.
Early in the session, despite importer dollar demand, the Central Bank asked banks not to sell the greenback beyond 130.34 levels, dealers said. Central Bank officials were not available for comment.
Dealers expect the currency would trade in a range of 130.40 to 130.50 in the near future due to expected importer dollar demand, but then gain due to inflows.
Some dealers expect the rupee to face downward pressure due to continued imports and if the United States finds the island nation breaching its sanctions laws after the Government Spokesman revealed the country had imported Iranian crude via third parties.
Currency dealers said it was too early to speculate about the implications of the country breaching US sanctions. However, it has been a relief for the market so far that nothing has happened on this issue, they added.
Sri Lanka’s oil import bill could rise if it has to buy more refined oil, dealers said.
Dealers expect the currency to be stable if there is no pressure from the oil import bills due to rising exports and a fall in imports and private-sector credit growth.
