Mumbai: The rupee eased on Monday, 5 November, taking cues from Asian equity markets, which slipped on concerns about further fallout from the US subprime crisis, though the prospect of fresh capital flows limited losses, dealers said.
At 9:50am (0420 GMT), the partially convertible rupee was at 39.362/372 per dollar, slipping from Friday’s finish of 39.31/32. It remained in sight of 39.22, its strongest since March 1998, hit last week.
“The signs from Asia are negative, and the market is a little concerned, but this seems like a temporary blip,” said a dealer with a private bank, who expected the rupee to trade in a 39.25-39.40 range on Monday.
Asian stocks eased on Monday with financial shares extending their slide as persistent worries offset a positive US employment report. Major share indices were trading between 0.5-1% lower.
US banking giant Citigroup said it may suffer an $11 billion write-down for subprime losses and that its chairman and chief executive had resigned.
Still, dealers said that when the rupee moved towards its early low of 39.40, the market started selling dollars, an indication that the local unit was widely expected to appreciate in the near term.
“The Sensex did well in the last session despite other Asian stock markets falling, and this has not been lost on the market,” said the dealer, referring to the fast-rising benchmark share index.
Massive overseas investment flows into local equities have helped lift the rupee by more than 12% this year.