Rupee tumbles to new life-time low of 59.68 as dollar demand weighs
Quotes

Rupee tumbles to new life-time low of 59.68 as dollar demand weighs

Last Updated: Monday, June 24, 2013, 18:22
 
 Comment 1
 
Rupee tumbles to new life-time low of 59.68 as dollar demand weighs
Mumbai: Month-end dollar demand from oil importers and hefty FII outflows dragged down the rupee on Monday by 41 paise to close at new life-time low of 59.68, amid speculation that the RBI stepped in to check the currency slide as it approached nearly 60-mark.

At the Interbank Foreign Exchange (Forex) market, the domestic unit commenced lower at 59.55 a dollar as against last weekend's close of 59.27. It continued its downslide to a low of 59.83, before recovering some ground to settle at 59.68 -- still showing a fall of 41 paise or 0.69 percent. The rupee's previous all-time closing low was 59.57 on June 20.

FIIs pulled out over USD 250 million (Rs 1,552.98 crore) from stocks today, provisional data from the bourses showed.

"Rupee closed weak taking cues from strong dollar and weak equities in India. Strong month end dollar demand from oil importers also weighed which pushed rupee again past 60.00 (futures) levels intra-day," said Pramit Brahmbhatt, CEO, Alpari Financial Services (India).

With the the rupee coming near its alltime (intra-day) low of 59.97/98 levels, "PSU banks were seen selling dollars at the behest of the RBI helping the rupee to some extent", said forex head of a leading private bank.

A weak rupee has a cascading effect on price rise as imports like oil become costlier amid the the government trying to revive growth in the economy.

The dollar index was up by 0.21 percent against a basket of six major global rivals. The US currency has been moving up after US Fed said it may taper off its USD 85 billion a month bond buying programme from later this year and ultimately end it 2014. This has sparked off fears that inflows to emerging markets like India will slow down as the US economy recovers.

Global brokerage firm Standard Chartered today lowered rupee forecast for the year end to 60.5 from 53 on the back of continued strength in US dollar, among other factors.

In order to arrest rupee depreciation, RBI has capacity to sell "up to USD 30 billion" from the forex reserves, according to Bank of America Merill Lynch.

The Indian benchmark Sensex today plunged by 233.35 points to more than two-month low.

"Driven by huge outflows from debt markets and consistent strength in dollar, the rupee fell towards 59.83 levels. FIIs have sold cash shares for nine straight sessions, totalling Rs 7,760 crore. Euro falling towards USD 1.3078 levels against dollar also contributed to the fall in rupee," said Abhishek Goenka, Founder and CEO, India Forex Advisors.

For June so far, FIIs have offloaded shares and debt securities worth over USD 5 billion. The economic logic for foreign funds to invest in domestic debt instruments is withering away as yield differentials are narrowing fast, traders said.

Meanwhile, premium for forward dollar recovered on fresh payments from banks and corporates.

Benchmark six-month forward dollar premium payable in November rose to 153-155 paise from last Friday's close of 151-1/2-153 paise. Far-forward contracts maturing in May also firmed up to 315-1/2-317-1/2 paise from 310-1/2-312 paise.

The RBI fixed the reference rate for the US dollar at 59.7340 and for the euro at 78.2286.

Rupee fell back against the pound sterling to 91.70 from last weekend's close of 91.58 and also turned negative against the Japanese yen to end at 60.91 per 100 yen from 60.65.

It, however, edged up further against the euro to 78.23 from previous close of 78.26.

PTI


First Published: Monday, June 24, 2013, 18:22


Comments


comments powered by Disqus
G20 Summit 2014
G20 Summit 2014
2014`s Top People in Business: Fortune
2014`s Top People in Business: Fortune
World Bank`s Top 10 Places for Business
World Bank`s Top 10 Places for Business
India`s top ten billionaires
India`s top ten billionaires
Top 10 billionaire cities- In Pics
Top 10 billionaire cities- In Pics

Web Wrap
Contact Us : Privacy Policy : Legal Disclaimer
Copyright © Zee Media Corporation Ltd. All rights reserved