Rupee ends at new 64.55/$ low; ‘Do not panic,’ says PC
24 Aug 2013 5:10 AM IST
Stocks rose on Thursday for the first time in five days, with the Sensex vaulting 407 points as investors chased beaten down blue chips, ignoring the continuing plunge of the rupee which closed at a fresh all-time low of 64.55 after going past 65.50 against the dollar. The rise in the stock markets helped investors gain over Rs 1.17 trillion. The rupee depreciation, largely on account of the burgeoning current account deficit, threatens to stall government moves to revive growth before the next elections.
Finance Minister P Chidambaram, who held a three-hour meet earlier in the day with Reserve Bank of India (RBI) Governor D Subbarao and his designated successor Raghuram Rajan, said, ‘There is no cause for panic that seems to have gripped the currency market and that is feeding into other markets. We are confident that stability will return to these markets and we can get on with the task of promoting investment and growth, Chidambaram said. At a in a separate media briefing, RBI Governor Duvvuri Subbarao said India has adequate forex reserves to meet the current situation.
The rupee plunged to yet another record low of 65.56 on Thursday. Till now, the Union Government and Reserve Bank of India’s (RBI) steps to lift the national currency have got patchy results and some experts warn that it may soon hit 70.
Meanwhile, gold prices surged by Rs 625 to Rs 31,750 per 10 grams in New Delhi while 10-year bond yields fell to 8.23 per cent from 8.41 per cent.
Led by metal stocks which rose after good Chinese manufacturing data, value-buying helped the Bombay Stock Exchanges’ (BSE) benchmark 30-share Sensitive Index (Sensex) jump by 407.03 points (2.27 per cent) to end at 18,312.94. In the previous four days, the 30-share index lost over 1,400 points while the rupee fell from 61.1 to 64.5 in this period.
Experts feel that stocks may surrender these gains unless the rupee stabilises. ‘One should maintain a cautious approach and wait for a sustained recovery of the rupee,’ said Religare Securities President (Retail Distribution) Jayant Manglik. Wednesday’s US Federal Open Market Committee’s (FOMC) minutes strongly indicated an imminent easing of the $85 billion-per-month bond buying programme. This led to a recovery in the US dollar index and a sell-off in the global markets.
The rupee closed down 44 paise. It also breached the 102-mark against the British pound before closing at 100.6.
Finance Minister P Chidambaram, who held a three-hour meet earlier in the day with Reserve Bank of India (RBI) Governor D Subbarao and his designated successor Raghuram Rajan, said, ‘There is no cause for panic that seems to have gripped the currency market and that is feeding into other markets. We are confident that stability will return to these markets and we can get on with the task of promoting investment and growth, Chidambaram said. At a in a separate media briefing, RBI Governor Duvvuri Subbarao said India has adequate forex reserves to meet the current situation.
The rupee plunged to yet another record low of 65.56 on Thursday. Till now, the Union Government and Reserve Bank of India’s (RBI) steps to lift the national currency have got patchy results and some experts warn that it may soon hit 70.
Meanwhile, gold prices surged by Rs 625 to Rs 31,750 per 10 grams in New Delhi while 10-year bond yields fell to 8.23 per cent from 8.41 per cent.
Led by metal stocks which rose after good Chinese manufacturing data, value-buying helped the Bombay Stock Exchanges’ (BSE) benchmark 30-share Sensitive Index (Sensex) jump by 407.03 points (2.27 per cent) to end at 18,312.94. In the previous four days, the 30-share index lost over 1,400 points while the rupee fell from 61.1 to 64.5 in this period.
Experts feel that stocks may surrender these gains unless the rupee stabilises. ‘One should maintain a cautious approach and wait for a sustained recovery of the rupee,’ said Religare Securities President (Retail Distribution) Jayant Manglik. Wednesday’s US Federal Open Market Committee’s (FOMC) minutes strongly indicated an imminent easing of the $85 billion-per-month bond buying programme. This led to a recovery in the US dollar index and a sell-off in the global markets.
The rupee closed down 44 paise. It also breached the 102-mark against the British pound before closing at 100.6.
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