Reuters: The rupee hit a new record low of 125.60 on Friday due to importer dollar demand, despite a large dollar inflow to fund a block deal in the stock market.
The rupee closed at 125.55/70 a dollar, down from Thursday’s close of 125.10/30. Three dealers Reuters spoke to said the highest trade was done at 125.60.
Central Bank Governor Ajith Nivard Cabraal on Friday told Reuters the rupee would recover substantially due to inflows at least $ 365 million into stocks, Government securities, banks, and a hotel project.
But currency dealers said they were sceptical the inflows would ease depreciation pressure on the rupee, as the inflows would not be coming to the market. Instead, dealers said the Central Bank has been absorbing them via swaps.
“If those inflows are swaps, definitely they are not going to help the market.” said a currency dealer on condition of anonymity.
Cabraal said a “fair amount” of the inflows will be absorbed by the Central Bank to boost reserves.
Analysts expect the rupee to recover in April on declining dollar demand and expected exporter conversions.
The rupee has depreciated nine per cent since the central bank on 9 February stopped defending a specific exchange rate. A Reuters monthly forex poll has forecast the rupee to fall as far as 128.50 by the end of August.
The stock market meanwhile rose around one per cent after Malaysia’s State investment arm, Khazanah Nasional, bought an 8.8 per cent stake in top conglomerate John Keells Holdings for about $ 120 million.
Shares in Keells moved down nominally to 195.10 rupees.
The main share index edged up 0.96 per cent or 51.85 points to 5,449.05, highest since 24 February.
The day’s turnover was Rs. 15.69 billion ($ 125.37 million), highest since 1 April 2008 and seven times of last year’s daily average of 2.3 billion. Volume was 113.5 million. Last year’s daily average was a record 102.7 million.
Khazanah’s buying in Keells boosted the day’s net foreign buying to Rs. 14.5 billion, extending the offshore net foreign inflow to Rs. 17.7 billion ($ 141.43 million) so far this year, after a net outflow of 19.1 billion last year.
The Colombo Bourse is one of the worst performers this year among Asian markets, with a 10.30 per cent loss.
source - www.ft.lk
No comments:
Post a Comment