Rupee down 11 paise at 54.88 on dollar demand
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Rupee down 11 paise at 54.88 on dollar demand

Last Updated: Friday, May 17, 2013, 19:47
 
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Rupee down 11 paise at 54.88 on dollar demand
Mumbai: Registering its biggest fall in a week, the rupee on Friday weakened by 11 paise to close at 54.88 against US dollar on good demand of the American currency from importers on speculation that Federal Reserve may slow its stimulus programme, leading to capital inflows drying up here.

At the Interbank Foreign Exchange (Forex) market, the domestic unit commenced lower at 54.87 a dollar from previous close of 54.77 and immediately touched a low of 55.00.

About USD 150 million in FII flows and some dollar selling helped rupee later recover to touch a high of 54.80. It finally settled slightly weak at 54.88 - a fall of 11 paise or 0.20 percent. This is the worst show by the local currency since its 55-paise drop on May 10.

In stock markets, the BSE S&P Sensex today improved further by 38.79 points or 0.19 percent, extending gains for the fourth straight day.

The dollar index strengthened today by 0.20 percent against a basket of six major currencies, trading at its best levels in 10 months after reports said a Federal Reserve official has projected the possible timing of a winding down of the Fed's bond buying programme.

The bond purchases inject fresh dollar in the market and a slower rate of buying is expected to increase dollar demand as supply gets reduced, said treasury head of a bank.

Indian stocks and the rupee have benefitted from dollar liquidity induced by the US Fed stimulus.

Pramit Brahmbhatt, CEO, Alpari Financial Services (India) said: "Rupee traded low against dollar although the fall was capped by the Indian shares that traded positively. The dollar index traded positively as Euro continued to trade weak against the mighty."

Resistance for USDINR (Spot) pair is at 55.15 and the trading range for the USD/INR pair is expected to be within 54.70 to 55.20, he added.

"Rupee was seen touching the key level of 55.00 once again. The fall in the euro was offset by the gains in the domestic stock markets. Indian data released this week have been mixed, thereby giving no direction to the rupee. WPI eased on monthly basis but trade deficit continues to be a concern for the economy," said Abhishek Goenka, Founder and CEO, India Forex Advisors.

Meanwhile, the premium for the forward dollar softened on fresh receipts by exporters.

The benchmark six-month forward dollar premium payable in October eased to 157-1/2-159-1/2 paise from Thursday's close of 158-1/2-160-1/2 paise.

Far-forward contracts maturing in April settled lower at 319-1/2-321-1/2 paise from 321-1/2-323-1/2 paise.

The RBI fixed the reference rate for the US dollar at 54.8865 and for the euro at 70.5785.

The rupee remained weak against pound sterling to end at 83.68 from overnight close of 83.39. It also moved down further against the euro to 70.65 from 70.50.

Rupee declined against the Japanese yen to 53.56 per 100 yen from last close of 53.40.

PTI


First Published: Friday, May 17, 2013, 19:47


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