Rupee inches up

The rupee inched up on Thursday as increase dollar inflows outmatched importers’ demand, dealers said.

The local currency closed at 154.23 against the greenback, compared with the previous closing of 154.26 in the interbank market.In the open market, the rupee ended firmer at 154.30 against the dollar.

“The currency posted slight gains on the back of lower import payments and good dollar inflows,” a dealer said. Another dealer said exporters sold dollars in the market, further improving supplies of the greenback.

In addition to exporters sales, higher foreign portfolio investment and foreign direct investment had also supported the currency. Reports of drafting strategic framework by the government to boost exports lifted sentiment.

Dealers expected the local currency to remain stable due to contraction in the current account deficit and continuous foreign inflows in the debt market. The current account deficit fell 72 percent to $2.6 billion in the seven months of the current fiscal year. Market participants see the current account deficit to further narrow as a result of expected increase in exports and import substitution.