Rupee falls slightly on dollar demand from foreign bond sellers
Friday, 10 October 2014 01:45
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Reuters: The rupee ended a tad weaker on Thursday due to dollar demand from foreign bond sellers and importers, dealers said.
The spot currency ended at 130.35/45 per dollar compared with Tuesday’s close of 130.32/36. Both the stock and foreign exchange markets were closed on Wednesday for a Buddhist religious holiday. Currency dealers and a bond trader said there was demand for dollars from foreign investors for selling bonds but in thin volumes.
Treasury Secretary P.B. Jayasundera said on Thursday rupee appreciation is unavoidable in the medium to longer term due to higher export earnings and inflows from services.
The Central Bank in the last week of September limited the spot currency range to between 130.40 and 130.50, to prevent any sharp fall amid heavy equity selling and pullback by foreign investors from Government securities.
Currency dealers expect the rupee to weaken further on the back of sustained selling by foreign investors in Government securities, which are already at multi-year lows, and rising imports in a low interest rate environment.
Overseas investors sold a net Rs. 16.9 billion ($129.7 million) worth of Government securities in the week ended 1 October, after selling Rs. 5.07 billion worth of Government securities in the previous week, data from the Central Bank showed.
