Rupee snaps eight-day rally on cues of fund outflow

Rupee snaps eight-day rally on cues of fund outflow
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First Published: Sat, Nov 03 2007. 12 44 AM IST
Updated: Sat, Nov 03 2007. 12 44 AM IST
Mumbai: The rupee fell, snapping an eight-day rally, on speculation that a slide in Asian stocks will prompt investors to take money out of the region. The rupee also ended its longest winning streak in 10 months on speculation that Reserve Bank of India (RBI) will sell it to stem a rally that may hurt exports.
“Asian stock markets are falling again on subprime concerns,” said R.K. Gurumurthy, head of treasury at ING Vysya Bank Ltd in Mumbai.
“The rupee will fall on concerns about fund outflows.”
The rupee dropped to 39.315 per dollar at the close in Mumbai, from 39.31 on Thursday, according to data compiled by Bloomberg.
The currency rose as high as 39.24 in intra-day trading on Thursday, its strongest since February 1998.
Asian stocks fell the most in more than two months on concern that losses from US subprime loans will reduce profits.
The Morgan Stanley Capital International Asia-Pacific Index lost 2.2% to 168.61 in Tokyo, its biggest drop since 22 October.
The rupee also fell on speculation that RBI sold it to prevent a stronger currency from hurting exporters.
RBI has bought a record $40 billion (Rs1.58 trillion) in the eight months through August to curb the rally in the currency that touched a nine-and-a- half year high this month.
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First Published: Sat, Nov 03 2007. 12 44 AM IST