Rupee slips 9 paise to 62.60 but posts 1st monthly gain in five
The rupee fell further by nine paise Monday to an almost one-week low of 62.60 against the dollar amid demand for the US currency from importers and weak equities ahead of data on key economic indicators, including the current account deficit.
Mumbai: The rupee fell further by nine paise Monday to an almost one-week low of 62.60 against the dollar amid demand for the US currency from importers and weak equities ahead of data on key economic indicators, including the current account deficit.
While fresh capital outflows also weighed on the rupee, the local currency's decline was restricted by some weakness in the dollar overseas on concerns of a US budgetary impasse.
The rupee opened lower at 63 a dollar from Friday's close of 62.51 at the interbank foreign exchange market. It declined to a low of 63.03 on month-end dollar demand from importers, mainly oil refiners, and sluggish domestic stocks.
However, fresh dollar selling by exporters and a drop in the dollar overseas helped to lift the rupee to a high of 62.50 before it settled at 62.60, a loss of nine paise or 0.14 percent. Last Friday, it had plunged by 44 paise.
This was the lowest level since September 24 (62.75).
However, the rupee gained 310 paise or 4.7 percent in September -- the first monthly gain since April.
"It was seen depreciating ahead of the key data which includes June quarter CAD data and the fiscal deficit for the April-August period," said Abhishek Goenka, CEO of India Forex Advisors. "The slump in the global stock markets and Asian currencies contributed to the weakness in the Indian rupee."
The 30-share S&P BSE Sensex plunged 347.50 points or 1.76 percent as global markets sank, with the US bracing for a government shutdown and Italian Prime Minister Enrico Letta calling a parliamentary vote of confidence on Wednesday.
FIIs sold a net Rs 244.95 crore of shares last Friday, according to provisional data with the stock exchanges.
The dollar index, which tracks the USD against a basket of six major currencies, was down by 0.02 percent.
Government data released after the markets closed showed the CAD widened to 4.9 percent of GDP in April-June quarter.
Pramit Brahmbhatt, CEO of Alpari Financial Services (India) said: "The dollar came under pressure today...As a potential US government shutdown possibility was seen, while the euro was separately pressured by the threat of fresh Italian elections."
Forward dollar premiums recovered on fresh payments from banks and corporates.
The benchmark six-month forward dollar premium payable in February rose to 235-1/2-239-1/2 paise from 233-237 paise previously and far-forward contracts maturing in August finished higher at 457-1/2-461-1/2 paise from 453-456 paise.
The RBI fixed the reference rate for the dollar at 62.7770 and for the euro at 84.6745.
The rupee remained weak against the pound sterling to end at 101.02 from last weekend's level of 100.61 and eased further to 84.50 per euro from 84.48. It dipped against the Japanese yen to 64.12 per 100 yen from 63.46 previously.