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Rupee extends drop on Korean tensions

Rupee extends drop on Korean tensions
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First Published: Tue, Nov 23 2010. 04 14 PM IST
Updated: Tue, Nov 23 2010. 04 14 PM IST
Mumbai: Rupee extended its fall to fresh two-month lows on Tuesday afternoon, tracking the dollar’s gain versus majors following exchange of artillery fire on the Korean peninsula.
North Korea on Tuesday fired dozens of artillery shells at a South Korean island, setting buildings on fire and prompting a return of fire by the South, Seoul’s military and media reports said.
At 1:28pm, the partially convertible rupee was at Rs 45.63/64 per dollar, after touching Rs45.6750, its lowest since 23 September and below Rs 45.405/415 at close on Monday.
Shares fell more than 3% in afternoon trade in what traders called a knee-jerk reaction to North Korea firing dozens of artillery shells at a South Korean island.
The dollar index which tracks the greenback’s performance against a basket of major currencies, was up 0.4%.
The US dollar rose broadly after North Korea fired artillery at a South Korean island, sending investors in search of safety and putting geopolitical risk alongside Europe’s debt crisis as reasons to play it safe to the year end.
One-month offshore non-deliverable forward contracts PNDF were quoted at Rs 45.96, weaker than the onshore spot rate, suggesting a bearish near-term outlook.
In the currency futures market INRFUTURES, the most traded near-month dollar-rupee contracts on the National Stock Exchange, MCX-SX and United Stock Exchange were all at Rs 45.66, with the total traded volume on the three exchanges at $4.2 billion.
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First Published: Tue, Nov 23 2010. 04 14 PM IST
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