Rupee drops on broad dollar gains

Rupee drops on broad dollar gains
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First Published: Mon, May 03 2010. 10 25 PM IST
Updated: Mon, May 03 2010. 10 25 PM IST
Mumbai: The rupee weakened on Monday, snapping a three-session gain, weighed by the dollar’s broad gains against major currencies and weak local shares. The partially convertible rupee closed at 44.5150/5250, 0.3% weaker than its Friday’s 44.36/37 close. It traded in a range of 44.50-44.6025 during the session.
“There was some good corporate selling seen which helped the rupee in late trade,” said Vikas Chittiprolu, a senior foreign exchange dealer at state-run Andhra Bank.
Three dealers said a large corporate sold around $150 million (Rs669 crore) which helped the rupee recover from the day’s low.
Traders said losses in the domestic share market also added to the selling pressure on the rupee and further equities sell off over the week could push the rupee down to 44.75 levels.
Shares opened the month on a weak note and shed nearly 1%, as global markets dragged lower on concerns over the €110-billion rescue package for debt-laden Greece, the biggest ever for a single country, and fiscal problems in the euro zone.
Foreign buying of domestic shares are a key support for the rupee. Portfolio inflows have reached $6.6 billion so far in 2010, of which $2.1 billion came in April. Last year, the inflow had hit a record $17.5 billion, pushing the rupee up 4.7%.
In the currency futures market, the most traded near-month dollar-rupee contracts on the National Stock Exchange and MCX-SX closed at 44.6250 and 44.63, respectively, with the total traded volume on the two exchanges at a low $5.9 billion.
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First Published: Mon, May 03 2010. 10 25 PM IST
More Topics: Rupee | Currency | Dollar | Foreign Exchange | Markets |