BackRupee falls to 1-week low on weak shares, high oil
Rupee falls to 1-week low on weak shares, high oil
PremiumMumbai: The rupee fell to a one-week low on Thursday, dragged down by surging oil prices that pushed up dollar demand from oil importers as well as battered stocks, but a weak dollar overseas prevented a steeper fall.
The partially convertible rupee ended at ₹ 45.48/50 per dollar, its weakest since 15 February, after trading in a range of ₹ 45.25-45.50 intra-day. It had closed at ₹ 45.12/13 on Wednesday.
“The main factors were stocks and oil. The market was negative by more than 500 points," said Kamlakar Rao, chief foreign exchange dealer with state-run Allahabad Bank.
“If the basket of currencies had not been strong against the dollar, the rupee could have gone to 45.80 levels," he said.
The index of the dollar against six major currencies was down 0.31% at 77.180 points during the close of the local forex market.
Oil surged more than 7.5% to its highest since August 2008 on Thursday on concern unrest in Libya could spread to other major oil producers in the Middle East, including Saudi Arabia.
Oil is India’s biggest import and state-run oil refiners are the largest buyers of the dollar in the domestic currency market.
Indian shares tumbled 3% on Thursday in their biggest one-day fall in almost 16 months as the Libyan turmoil sent oil prices to their highest in nearly 2.5 years and threatened global economic growth.
Foreign funds were net sellers of $1.59 billion worth of shares in this year until Feb. 23
Traders see the rupee trading in a range of 45.35-45.55 on Friday.
The one-month onshore forward premiums were quoted at 26.00 points, against Wednesday’s 23.00, and the one-month offshore non-deliverable forward contracts were quoted at 45.80, weaker than the onshore spot rate.
In the currency futures market, the most traded near-month dollar-rupee contracts on the National Stock Exchange, the MCX-SX and the United Stock Exchange closed at 45.7425, 45.7500 and 45.7500, respectively, with the total traded volume at about $6.38 billion.
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