Mumbai: The Indian rupee weakened on 5 June, on worries of more foreigners pulling out funds from the stock market and tracking the dollar’s strength against some major currencies.
At 10 a.m, the partially convertible rupee was at 42.845/855 per dollar, off an early low of 42.9750 and 0.2% weaker than its previous close of 42.77/78. It is down more than 8% so far in 2008.
“The rupee is weaker mainly because of market fears about amount of stocks foreigners may have sold yesterday and the dollar is also stronger against major currencies overseas,” said Paresh Nayar, chief dealer at Development Credit Bank.
Traders expect the central bank to intervene to curb any sharp depreciation of the rupee beyond 43.
Dealers said there was no clarity on whether a decision to provide foreign exchange to oil companies has been implemented and there was still some dollar demand from refiners in the market.
The dollar rose against the euro and other major currencies on 5 June, extending gains made the previous day after the US Federal Reserve chief Ben Bernanke emphasised concerns, yet another sign the central bank is likely done cutting rates.