BackRupee posts biggest fall in 5-months
Rupee posts biggest fall in 5-months
PremiumMumbai: The Indian rupee posted its biggest one-day fall in 5-months on Friday, as sharp losses in local shares and bunched-up dollar demand after the US Veteran’s Day holiday weighed.
The partially convertible rupee closed ₹ 44.80/81 per dollar, after hitting ₹ 44.85, its weakest since 29 September and below Thursday’s close of ₹ 44.31/32. The local unit ended down 1.1% on the day, its worst daily fall since 1 June.
On the week, the rupee dropped 1.35%, its worst weekly fall in nearly six months.
“The dollar was stronger in the non-deliverable forwards, commodities prices were lower, equities were down, dollar was strong against majors through most of the session. Together, all pushed the rupee lower," said Vikas Chittiprolu, a foreign exchange dealer with state-run Andhra Bank.
The index of the dollar against six majors was down 0.2% when the rupee market closed but it had been up as much as 0.33% earlier in the day.
The euro bounced from six-week lows against the dollar on Friday as EU leaders sought to reassure nervous bondholders and on speculation, which was quickly denied, that a rescue package for Ireland was being hammered out.
Indian shares posted their worst weekly fall in more than 6 months and closed 2.1% lower on Friday, as concerns over Ireland’s debt woes sparked a worldwide sell-off in riskier assets. Banks led the losses.
Foreign funds have however purchased shares worth a record $28.5 billion, in addition to last year’s $17.5 billion.
“Next week’s outlook depends on the G-20, both the outcome and any fresh cues or comments will be closely monitored," said Ashtosh Raina, head of foreign exchange trading at HDFC Bank.
G-20 leaders closed ranks on Friday and agreed to a watered-down commitment to watch out for dangerous imbalances, yet offered investors little proof that the world was any safer from economic catastrophe.
One-month offshore non-deliverable forward contracts were quoted at 45.16, 0.8% weaker than the onshore spot rate, suggesting a bearish near-term outlook.
In the currency futures market, the most traded near-month dollar-rupee contracts on the National Stock Exchange, MCX-SX and United Stock Exchange closed at 44.95, 44.9450 and 44.9575 respectively, with the total traded volume on the three exchanges at an average $8.3 billion.
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