Mumbai: The rupee eased for a second day on Wednesday on worries a global equity sell-off may trigger outflows from Indian shares too. Subdued Asian currencies also weighed.
At 11:03am, the partially convertible rupee was at 44.34/35 per dollar after touching 44.38 in opening trades, and weaker than 44.27/28 on Tuesday when it had dropped 0.5%.
Traders forecast a 44.30-44.50 range for the day, with oil refiners buying dollars to settle payments to Iran.
“Equities are taking a beating all over and so investors may prefer to cash out from local markets as well,” said a senior foreign exchange dealer at a state-run bank.
The main stock index fell to its lowest in nearly six weeks after renewed concerns about the global economy and US debt problems unnerved investors and sent world markets sliding.
The rupee’s drop was held in check when software services exporters cashed in their dollars, traders said.
Asian currencies too retreated against the US unit.
The US had its triple-A rating confirmed by two key ratings agencies on Tuesday after Washington struck a last-minute deal to avoid a debt default, but threats of future downgrades remain.
The one-month onshore forward premium was steady at 22.25 points, while the three-month was at 67 points from 64.75 and the one-year was at 217.50 points from 219.
One-month offshore non-deliverable forward contracts were quoted at 44.53, weaker than the onshore spot rate.
In the currency futures market , the most traded near-month dollar-rupee contracts on the National Stock Exchange, the MCX-SX and the United Stock Exchange were all at 44.52. The total volume stood at $2.82 billion.