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Rupee 1-week forwards edge up on exporter dollar sales

24 June 2016 11:00 am - 0     - {{hitsCtrl.values.hits}}

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REUTERS:  Sri Lankan rupee one-week forwards ended firmer yesterday due to dollar selling by exporters who were expecting further strengthening of the currency after a state-run bank sold the U.S. currency in early trade, dealers said. 


Importers were reluctant to buy dollars, expecting the currency to strengthen further on the state-run bank’s intervention, dealers said. One-week dollar/rupee forwards, which have been acting as a proxy for the spot rupee in the absence of trade in three-day forwards, ended at 147.10/30 per dollar, higher than Wednesday’s close of 147.40/70. “Rupee ended firmer as importers side-stepped expecting Central Bank to strengthen rupee further,” said a currency dealer asking not to be named.  
“We have seen some exporter conversions also.” 


The Central Bank usually directs the market via two state-run banks, but yesterday, it was not clear if the bank had sold dollars on behalf of the apex bank. Dealers said the market was perplexed by the Central Bank’s intervention in both spot rupee and forwards at a time when the rupee was facing downward pressure. 

Central Bank officials were not available for comment. Moody’s Investors Service on Monday changed the country’s outlook to negative from stable, citing further weakening in some fiscal metrics in an environment of subdued GDP growth, which could lead to renewed balance of payments pressure. 
The Central Bank raised the spot rupee’s peg to 145.25 per dollar from 144.50. The spot rupee was not actively traded for an eighth straight session yesterday, dealers said. For a sixth straight session, there was no active trading in three-day dollar/rupee forwards, known as spot next. The forwards closed at 144.85/90 per dollar on June 15. Spot next, which has acted as proxy for the spot currency since January, indicates the exchange rate for the day following conventional spot settlement.
For yesterday’s trade, the spot next settlement takes place five days ahead due to the intervening weekend. Foreign investors net bought Rs.6.67 billion ($46.06 million) worth of government bonds in the week ended June 15, Central Bank data showed.

 

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See Kapruka's top selling online shopping categories such as Toys, Grocery, Flowers, Birthday Cakes, Fruits, Chocolates, Clothing and Electronics. Also see Kapruka's unique online services such as Money Remittence,News, Courier/Delivery, Food Delivery and over 700 top brands. Also get products from Amazon & Ebay via Kapruka Gloabal Shop into Sri Lanka.