×
Home Companies Industry Politics Money Opinion LoungeMultimedia Science Education Sports TechnologyConsumerSpecialsMint on Sunday
×

Rupee off 30 months low; outlook subdued

Rupee off 30 months low; outlook subdued
Comment E-mail Print Share
First Published: Fri, Nov 11 2011. 11 08 AM IST

Updated: Fri, Nov 11 2011. 11 08 AM IST
Mumbai: The rupee pulled back on Friday as companies cashed in their dollars after the Indian unit slid to its lowest in more than two-and-a-half years.
However, sluggish stocks and a worsening trade deficit kept the outlook for the rupee subdued.
The partially convertible rupee initially fell to 50.4200 against the dollar, a level last seen on 28 April 2009, as trading resumed after a holiday on Thursday.
It later rebounded to 49.9650 and by 10:15 am was trading at 50.1050/1150, 0.1% stronger than Wednesday’s close of 50.1750/1850.
• • •
September IIP at 1.9% vs 4.1% m-o-m
• • •
“There was corporate dollar inflows which aided the rupee. But I think it will go back to 50.25 levels again during the day,” a dealer with a state-run bank said.
Shares were trading down 0.7% due to sharp increases in interest rates and slowing spending.
Analysts polled by Reuters were bearish on the rupee’s outlook. The Indian currency may retest a record low of 52.20 per dollar on a widening trade deficit, falling car sales and a Moody’s outlook downgrade of the country’s banking sector.
Trade deficit in October is seen at $19.6 billion, the highest in four years, the country’s trade secretary said on Tuesday, citing provisional data. At this rate, the trade deficit for the year could breach $150 billion, Rahul Khullar said.
The one-month onshore forward premium was at 25.75 points from 25.25 points on Wednesday, the three-month was at 64.50 points from 65.25 and the one-year was at 165.25 points from 167.75.
One-month offshore non-deliverable forward contracts were quoted at 50.50, weaker than the onshore spot rate.
In the currency futures market, the most traded near-month dollar-rupee contracts on the National Stock Exchange and the United Stock Exchange were both at 50.2400, while those on the MCX-SX were at 50.2475. The total volume was at $1.2 billion.
The euro inched higher and held above its recent one-month low on Friday, but market players were sceptical that it would see a sustained bounce due to uncertainty over whether Italy will make progress on fiscal reforms under new leadership.
• • •
Comment E-mail Print Share
First Published: Fri, Nov 11 2011. 11 08 AM IST
More Topics: Markets | Rupee | Currency | Asia | BSE |