Rupee weakens by 6 paise against dollar to 54.32
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Rupee weakens by 6 paise against dollar to 54.32

Last Updated: Wednesday, December 12, 2012, 19:50
 
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Rupee weakens by 6 paise against dollar to 54.32
Mumbai: In listless trading, the rupee fell back by six paise to end at 54.32 amid fresh dollar demand from importers ahead of the conclusion of US Fed's two-day meeting where it is widely expected to expand economic stimulus programme.

Around USD 175 million capital flows in Indian stocks, however, capped the rupee slide as importers, especially oil companies, stepped up dollar purchases, forex dealers said.

At the Interbank Foreign Exchange (Forex) market, the domestic unit resumed slightly lower at 54.29 from overnight close of 54.26. It later moved in a narrow 19-paise range of 54.15 and 54.34 before concluding at 54.32, showing a fall of six paise or 0.11 percent.

On Tuesday, it had risen by 22 paise or 0.40 percent.

Forex dealers said the rupee also tracked the Indian benchmark Sensex's movement which erased gains after IIP data and retail-level inflation numbers came out. The index closed down by 31.88 points or 0.16 percent.

As per provisional data, FIIs pumped in Rs 950 crore (USD 175 million approx) in stocks today.

The dollar index was down by 0.10 percent against a basket of six major currencies amid widespread expectations that the US Federal Reserve policy makers will decide to unleash further stimulus. The New York crude oil was trading above USD 86 a barrel in Europe today.

Pramit Brahmbhatt, CEO, Alpari Financial Services (India) said: "The combined CPI numbers came in at 9.9 percent which took away the sheen of sharp rise in October Industrial production numbers which beat the street estimates recording growth of 8.2 percent."

The outcome of the two day FOMC meet will be closely watched by the markets, said Abhishek Goenka, Founder & CEO, India Forex Advisors.

The US Fed concludes a two-day meeting today and the US central bank will announce its interest rate decision, followed by forecasts on economic growth, unemployment and inflation.

Forex experts said Fed will expand economic stimulus by announcing USD 40-45 billion in monthly treasury buys in addition to the programme to buy USD 40 billion in mortgage bonds each month.

The premium for the forward dollar also declined on fresh receipts by exporters.

The benchmark six-month forward dollar premium payable in May eased to 168-1/2-170-1/2 paise from previous close of 170-172 paise.

Far-forward contracts maturing in November moved down to 316-318 paise from 318-1/2-320-1/2 paise.

The RBI has fixed the reference rate for the US dollar at 54.2725 and for euro at 70.5470.

The rupee turned negative against the pound sterling to 87.69 from Tuesday's close of 87.25 and declined further to 70.75 per euro from 70.40.

It, however, recovered against the Japanese yen to 65.59 per 100 yen from previous close of 65.81.

PTI


First Published: Wednesday, December 12, 2012, 19:50


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