Rupee steady as state bank dlr sales offset importer demand

Reuters: The rupee ended steady on Tuesday as selling of dollars by a state bank offset importer dollar demand, dealers said.

Moral suasion by the Central Bank discouraged trading in the spot currency market, they added.

Rupee forwards were active, with the spot-next ending at 147.95/148.10 per dollar, compared with its previous close of 147.95/148.05.

The spot rupee was quoted at 146.90/95 per dollar, but there were hardly any trades.

“The (importer dollar) demand was there and the rupee is under pressure as there are not much of inflows, but the rupee ended steady as a state bank sold dollars,” a currency dealer said, asking not to be named.

“There was the Central Bank’s moral suasion also.”

The spot rupee is usually managed by the Central Bank, and market participants use the forward market levels for guidance on the currency.

Officials from the Central Bank were not available for comment.

Dealers also said foreign selling in government securities also put pressure on the currency.

Foreign investors sold Rs. 8.79 billion ($ 59.84 million) worth of government securities in the week ended 19 October, data from the Central Bank showed.

Dealers said the market was waiting for some direction from the national budget due on 10 November.