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

Rupee weakens for a third day

Rupee weakens for a third day
Comment E-mail Print Share
First Published: Thu, Jun 04 2009. 09 03 PM IST
Updated: Thu, Jun 04 2009. 09 03 PM IST
Mumbai: The rupee fell for a third day on Thursday as RBI intervention helped traders decide to take profits on a strong rally since mid-May, but the outlook was bullish on signs of improving activity and rising inflows.
The rupee has gained nearly 5% since the government won an unexpectedly strong mandate at elections last month, with investors drawn by the prospect of political stability and a renewed reform push.
The partially convertible rupee closed at Rs47.20/21 per dollar, 0.3% weaker than its previous close of Rs47.07/08. It rose as high as Rs46.75 on Wednesday, its strongest since early November last year.
Two dealers estimated the central bank may have bought about $500 million to prevent the rupee from gaining towards Rs47.
The central bank has previously said it buy or sell dollars in the foreign exchange market to smoothen volatility.
“The forex market was tracking the stocks and the dollar index today. There were talks of intervention around 47.10 rupees, but there was also decent demand from importers and corporates seen around those levels,” the head of treasury at a private sector bank said.
“The rupee however looks very buoyant. Looking at all the economic data and the positive sentiment post elections, it will be very difficult to halt the rupee’s rise. We could soon seen 46.50 levels,” he added.
India’s foreign exchange reserves rose by $6.4 billion to $260.6 billion in the last week of May, central bank data showed, and dealers said some of the rise would be due to intervention.
Indian shares rose nearly 1% to their best close in nine months on Thursday, taking its rally from its 2009 low in early March to more than 86%.
Much of the rise in the rupee from its record lows of Rs52.2 in early March has been fuelled by foreign funds, who have bought more than $6 billion of shares since mid-March after pulling out about $13 billion in 2008.
The dollar index, a gauge of the US performance against six majors, was marginally higher and weighed on the rupee in late trade. The index had dropped as much as 0.5% earlier in the day.
Comment E-mail Print Share
First Published: Thu, Jun 04 2009. 09 03 PM IST
More Topics: Rupee | Dollar | Currency | Markets | India |