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USD/INR up to 58.90 on Importers’ Dollar Demand

India’s rupee fell to a two-week low on speculation companies stepped up dollar purchases to meet month-end payments for shipments from abroad.

The currency weakened for a fourth day after the central bank doubled a limit on the amount of foreign currency importers can buy in the onshore forwards market, a move that could spur demand for the greenback, according to brokerage Mecklai & Mecklai Ltd. The rupee has retreated 1.4 percent from an 11-month high of 58.335 per dollar reached on May 23.

“Dollar buying by oil and gold importers is pressuring the rupee,” said Amogh Moghe, a Mumbai-based currency trader at Mecklai & Mecklai. “The easing of rules for importers by the Reserve Bank of India has also pushed dollar demand higher.”

Bloomberg [1]

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