Rupee down on importer demand, weak local shares

Rupee down on importer demand, weak local shares

Mumbai: The rupee gave up all early gains in afternoon trade on Thursday as local shares trickled lower, the euro pulled back from the day’s high and demand for dollars emerged from oil importers.

Traders said spot rupee rate had not yet found much solace in the government’s decision to raise ceiling on foreign institutional investment in government and corporates bonds by $5 billion each earlier in the day.

The euro was at $1.3467 after touching a high of $1.3517 earlier in the day. It had been at $1.3467 at end of rupee trade on Wednesday. The index of the dollar index was at 78.221 points from 78.222 points.

India’s main share index was down 1.7% as slowing economic growth and high interest rates kept mood guarded.

Oil is India’s biggest import item and oil refiners are the largest buyers of dollars in the domestic currency market.

The Reserve Bank of India will be careful about using foreign exchange reserves excessively to protect depreciation of the rupee, Subir Gokarn, a deputy governor of the Reserve Bank of India, told CNBC TV channel on Thursday.