Rupee at year high on remittances, exporter dollar sales

Rupee firmed to its highest close in nearly a year yesterday on high remittances and selling of dollars by exporters ahead of a festival season, currency dealers said, while stocks rose on foreign buying of bank shares.

The rupee ended 0.44 percent firmer at 125.65/70 to the dollar from Wednesday's close of 126.20/25, its highest level since April 9, 2012.

"This is mainly due to seasonal inflows due to inward remittances and exporter conversion of dollars ahead of the new year festival this month," said a currency dealer who declined to be identified. Sri Lankans will celebrate the traditional new year on April 13 and 14. The currency has risen 1.6 percent this year after falling 10.7 percent in 2012.

The main stock index ended 25.09 points, or 0.44 percent firmer at 5,753.56, its highest since March 21. Foreign investors were net buyers of Rs.17.3 million worth of shares, many of them bank shares, extending the year-to-date net foreign inflow to Rs. 5.66 billion.

Analysts said hopes of easing interest rates had helped boost domestic retail investor sentiment.

Yields in T-bills were steady at a weekly auction, ending a four-week rising trend, two days after the central bank chief said that interest rates would ease this year as the monetary authority maintains a loose monetary policy stance. Turnover on the stock exchange was Rs.1.64 billion ($12.99 million), well above this year's daily average of Rs.1.65 billion.

(REUTERS)