Rupee fails to maintain upward trend; ends at over 4-month low
Mumbai: After taking a respite for a week, the Indian rupee continued its downslide and tumbled by 108 paise to end the truncated week at more-than four-month low of 61.18 against the Greenback on distinctly weak local equities amid fresh dollar demand from importers.
The Forex market was closed on July 29 on account of "Ramzan Id".
Importers and some banks bought dollars and short-sellers covered their positions on hopes of further hike in the dollar value after the US Fed recently trimmed its monthly economic stimulus by USD 10 billion.
The dollar too gained against most peers as the American economy grows stronger, impacting negatively on the rupee value.
Fresh selling by Foreign Institutional Investors (FIIs) also put pressure on the rupee. FIIs pulled out USD 277.78 mln on first three trading sessions of the week, as per Sebi data.
At the Interbank Foreign Exchange (Forex) market, the domestic unit commenced slightly weak at 60.12 a dollar from last last weekend's close of 60.10 and it touched a two-week high of 60.05 on Wednesday.
However, later it met with strong resistance and fell sharply to breach 61-mark to over four-month low of 61.19 before settling the week at 61.18, a net fall of 108 paise --its worst drop since 112-paise plunge in the week ending January 24 -- or 1.80 percent.
On the drop in markets, RBI Governor Raghuram Rajan in Delhi said: "We are not immune to what is happening world markets."
Pramit Brahmbhatt, Veracity Group CEO said, "In the first half of the week, the rupee traded range-bound and tried to hold its pose, but in the second half it depreciated taking cues from strong dollar in global market."
"The dollar demand from oil importers and state-run banks for corporate and defence-related payments wounded the rupee. The rupee posted the third weekly fall in four weeks. The trading range for the rupee is expected to be within 60.50 to 61.50," he added.
The benchmark six-month forward dollar premium payable in January was quoted at 249.5-251.5 paise and far-forward contracts maturing in July 2015 at 490-492 paise.
The RBI fixed the reference rate for the USD at 60.8510 and the euro at 81.4615 from 60.1448 80.0173 last weekend.
The rupee reacted downwards against the pound Sterling to end the week at 102.97 from 102.05 preceding weekend and also fell back to 59.43 per 100 Japanese yen from 58.98.
It too slumped against the euro to 81.93 from last weekend's close 80.80.
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