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Indian rupee drops as stocks fall

Indian rupee drops as stocks fall
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First Published: Tue, Jul 08 2008. 11 44 AM IST
Updated: Tue, Jul 08 2008. 11 44 AM IST
Reuters
Mumbai: The Indian rupee weakened on 8 July after the stock market fell as much as 3% in opening deals, raising prospects for more foreign fund outflows.
At 10:02 a.m, the partially convertible rupee was at 43.36/37 per dollar, weaker than the previous close of 43.295/305. It hit a 15-month low of 43.50 last week.
“The rupee is mirroring the fall in the stock market but the central bank may step in around 43.50,” said a dealer at a state-run bank.
Asian stocks were weighed down by the financial sector after sharp declines in shares of Fannie Mae and Freddie Mac on funding concerns reminded investors about the fragility of global credit markets.
Foreign funds have been net sellers of $6.7 billion worth of Indian shares this year, helping push the rupee down 9.1% so far in 2008. Last year, they had bought a record $17.4 billion of shares and pushed the rupee up more than 12%.
One-month offshore non-deliverable forward contracts were quoting at 43.77/87, weaker than the onshore rate.
Most Asian currencies were steady with investor sentiment torn between falling oil prices and renewed credit fears, while authorities in South Korea and Indonesia intervened to prop up their currencies.
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First Published: Tue, Jul 08 2008. 11 44 AM IST
More Topics: Markets | India | Rupee | Dollar | Exchange Rate |