Millennium Post

rs plunges by 30p to near 6-month low of 55.41 per $

The rupee on Tuesday hit a nearly six-month low of 55.41, losing a staggering 30 paise due to sustained greenback demand from importers and weak local equities, extending losses for the third straight session. The Indian currency resumed higher at 54.97 per dollar from the previous close of 55.11 at the Interbank Foreign Exchange market.

It touched a high of 54.80 at the initial stages on an early rally in equities but later fell back to a low of 55.42 before concluding at 55.41, showing a fall of 30 paise (0.54 per cent). This is the rupee's lowest level this year. It had closed at 55.45 on November 27, 2012.

'The rupee weakened on account of the fall in equities and firmness in the dollar against the euro and other peers overseas. It is likely to fall to the 56-level this week,' said Ashtosh Raina, chief dealer at HDFC Bank.

FIIs injected Rs 679.44 crore ($122.6 million) in local equities on Tuesday, as per BSE provisional data. The dollar index, consisting of six major currencies, was up by 0.35 per cent, ahead of Wednesday's US Federal Reserve meeting.

There have been reports that the Fed's bond buying programme may end earlier than expected. Bond purchases inject fresh dollar in the market and earlier than expected closing may increase dollar demand as supply gets reduced, said the treasury head of a bank.

Alpari Financial Services (India) CEO Pramit Brahmbhatt said, 'The dollar index, which measures the US dollar's value against a basket of six major currencies, traded strong throughout the day which depreciated the rupee by over 0.50 per cent.'

It was a weak session for the rupee which was seen surpassing the key level of 55.20. Globally, the strong US dollar, weak Euro and negative stock markets added pressure on the rupee.

'Wednesday's US Federal Open Market Committee (FOMC) minutes, Federal Reserve Board Chairman Ben Bernanke's speech and a Bank of Japan (BOJ) press conference will be the key drivers for the foreign exchange (forex) market,' said India Forex Advisors Founder & CEO Abhishek Goenka.

Meanwhile, the premium for the forward dollar closed steady to better on stray paying pressure from banks and corporates. The benchmark six-month forward dollar premium payable in October ended at its overnight level of 155-157 paise while far-forward contracts maturing in April moved up to 319-321 paise from 315-1/2-317-1/2 paise.

The Reserve Bank of India (RBI) fixed the reference rate for the dollar at 55.0395 and for the euro at 70.9269. The rupee remained weak against the pound sterling to 83.92 from the overnight close of 83.76 and also dipped further against the euro to 71.22 from 70.89.

It settled lower against the Japanese yen too at 53.93 per 100 yen from last close of 53.73.
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