Rupee may remain stable

The rupee is likely to maintain the current levels against the dollar next week due to flat demand for hard currency by importers, dealers said on Saturday.

The currency pair is expected to trade in the range of 110.55/60 in the interbank market next week, forex dealers said. The rupee / dollar parity seems to remain stable.

The market participants have priced in the currency range to be somewhere around the current levels in the near-term. There are no major import and foreign debt payments scheduled for the days ahead, they said.

The rupee saw range-bound trades during the outgoing week, amid equal supply and demand for the foreign exchange.

The rupee commenced the week at 110.55/dollar on Monday. The insignificant demand and adequate liquidity helped the rupee manage at 110.54 during the entire week. However, the central bank’s foreign exchange reserves continued to slide on the back of external loan repayments.

The country’s foreign exchange reserves fell to $20.020 billion during the week ended January 5 from $20.154 billion a week ago. The State Bank’s reserves decreased $124 million to $13.982 billion due to external debt servicing and other official payments. In the open market, the domestic currency fell to an all-time low of 113.50 against the dollar in a volatile trade on Monday due to shortage of the US currency.

The State Bank’s move to cap the import of greenback against export of other currencies for the money changers up to 35 percent created dearth of the greenback in the kerb market.

The rupee posted some recovery after the central bank agreed to ease shortage, restoring 100 percent import of cash dollar against foreign currencies.