Mumbai: The Indian rupee dropped to its lowest level in more than three weeks on Thursday, weighed down by falling stocks and the dollar’s gains versus major currencies.
At 10:46am, the partially convertible rupee was at Rs46.70/71 per dollar, after hitting Rs46.78/79 that was its weakest since 11 June, and compared with Rs46.45/46 at close on Wednesday.
“The rupee is weak due to (dollar) buying in the NDF (non-deliverable forwards) apart from global stocks and Asian currency weakness,” said Sudarshana Bhat, chief dealer at state-run Corporation Bank.
One-month offshore NDF contracts were quoted at Rs46.84/94, weaker than the onshore spot rate.
The rupee fell 3.3% in the June quarter, its worst drop since the first quarter of 2009, when it had shed 4%.
The main stock index dropped more than 1% as risk appetite dampened across global markets as doubts resurfaced about the health of the world recovery and fresh concerns regarding Europe’s financial strength.
Indian manufacturing growth cooled in June after a surge in activity the prior month, mainly due to slowing production and rapidly easing input price pressures, a survey showed on Thursday.
“I expect the rupee to move in a range of Rs46.65 to Rs46.80 today. Selling (of dollars) should come at 46.80 levels,” Bhat added.
The index of the dollar against six major currencies was up 0.1% and would be watched, dealers said.
The euro hit a lifetime low against the Swiss franc on Thursday, as weaker-then-expected Chinese data added to doubts about the strength of the global recovery, while jitters about funding strains in the euro zone lingered.
In the currency futures market, the most traded near-month dollar-rupee contracts on the National Stock Exchange and MCX-SX were both at 46.82.