Mumbai: The rupee pulled back from one-month lows on Wednesday, 17 October, as shares trimmed large falls after the finance minister said foreign investors were welcome to invest in local stocks despite some planned curbs.
At 12:42pm (0712 GMT), the partially convertible rupee was at 39.58/59 per dollar, off an early low of 39.98 after Sebi proposed late on Tuesday curbs on some foreign investment in stocks. It had closed at 39.345/39.360 on Tuesday.
Finance Minister P Chidambaram endorsed the market regulator’s proposals, but said investors were still welcome to invest in India through offshore instruments known as participatory notes.
“His comments calmed some of the nervousness in the market,” said Ranjit Shah, a currency trader at Kotak Mahindra Bank.
“Exporters have been selling heavily and the currency should find support around the 39.50-39.55 levels,” he said. Reuters
Mumbai: The rupee slumped to two-week lows on Wednesday, 17 October, on worries foreigners may slash investments after the stock market regulator proposed curbs on the flow of foreign funds into shares, a key driver of the currency.
Late on Tuesday, the Securities and Exchange Board of India (Sebi) said that after consulting the government it was recommending changes in the policy on participatory note (PN) issuance, a route foreigners can use to buy shares and bonds.
“The situation is extremely fluid at the moment and the market will only stabilise only later in the day,” said Ashit Parekh, head of forex trading at IndusInd Bank.
At 9:39am (0409 GMT), the partially convertible rupee was at 39.88/89 per dollar, within sight of the 40 per dollar mark, down 1.4% from Tuesday’s close of 39.345/39.360. Last week, it had hit 39.27, its strongest level since March 1998.
Stock markets plunged at Wednesday’s open, triggering circuit breakers that shut the markets for one hour. Sensex, the 30-share benchmark BSE index was down 7.91% and the broader NSE index Nifty was down 9.25%. Reuters