Indian rupee falls for 5th week; closes at nearly 1-year low
Mumbai: Continuing its free fall for the fifth week in a row, the Indian rupee dipped by 56 paise to close at nearly one-year low of 57.06 against the Greenback following weak local equities amid sustained dollar demand from importers and banks.
However, weak dollar overseas and sustained capital inflows, although in small lots, could not able to stem the rupee fall, a forex dealer said.
At the Interbank Foreign Exchange (Forex) market, the local unit commenced lower at 56.55 a dollar from last weekend's close of 56.50 and immediately touched an intra-day high of 56.31 on Monday.
But, it later continued reel under pressure on dollar demand from importers, mainly oil refiners and gold, and touched nearly one-year low of 57.12 before settling at 57.06, exhibiting a fall of 56 paise, or 0.99 percent.
In straight five-week fall, the rupee has plunged by 312 paise or 5.74 percent.
The Indian benchmark S&P BSE Sensex closed the week down by over 331 points or 1.68 percent while FIIs pumped in Rs 772.60 crore in the week, including provisional figure of June 7.
The rupe comes precariously close to all time low of 57.32 touched last June-end.
The local currency had lost in the past five sessions on rising worries over current account gap and fears that withdrawal of US stimulus will hit inflows from overseas.
The rupee's recent weakness had prompted analysts to say the currency can revisit its all time low of 57.32 touched last June-end. RBI Governor D Subbarao has told the agency in an interview that the central bank does not target any particular exchange rate or any band for the rupee.
"Rupee had shown weakness in the recent trading sessions due to external factors like apprehension about tapering of QE by US Fed along with strengthening of dollar. Also, concerns regarding high CAD level had also pulled down the domestic currency. Rupee will remain under pressure in the near-term," IDBI Bank Treasury Head N S Venkatesh said.
Amid rupee crossing 57 mark, RBI Governor D Subbarao said: "RBI does not target any exchange rate. We intervene in foreign exchange market only to manage the volatility and to manage disruption to the macro economic situation."
Hemal Doshi, Currency Strategist, Geojit Comtrade said: "Rupee was possibly weakening due to statements from policy makers regarding high CAD and the current BoP situation. Otherwise, global market was quite stable."
Mr. Pramit Brahmbhatt, CEO, Alpari Financial Services (India) said" The Indian Rupee continued to trade low for the fifth consecutive week, taking cues from weak local equities which fell on worries about the Fed stimulus programme and slipped down to new 2013 lows.
"The Indian Rupee traded nealry one year low this week and crossed the 57 level convincingly. Rupee is heading towards its all time low of 57.32 at present this week it made a low of 57.12.
"Heavy dollar buying by gold and oil importers helped dollar to trade strong against the Rupee. The trading range for Spot USDINR is expected to be within 56.80 to 57.30 for Monday.
"Recommended to be cautious and Buy USD/INR Futures on dips with the appropriate stop loss as Rupee at this stage is expected to depreciate more against dollar. Pivot Point for the Pair is at 57.02 & below is the Support & Resistance levels," he added.
The premium for the forward dollar closed lower on fresh receipts by exporters.
The benchmark six-month forward dollar premium payable in November dropped to 155-157 paise from last weekend's close of 168-170 paise and far-forward contracts maturing in May also dipped to 309-311 paise from 333-335 paise.
The RBI fixed the reference rate for the US dollar at 56.7445 and for the euro at 75.2033 from previous weekend's level of 56.4958 and 73.6807 respectively.
The rupee tumbled against the pound sterling to 88.90 from preceding weekend's close of 85.97 and also plunged against the euro to 75.66 from 73.39.
It too tanked against the Japanese yen to 59.57 per 100 yen from last weekend's close of 56.33.