Rupee ends lower, falls for 3rd straight week

Rupee ends lower, falls for 3rd straight week

Mumbai: The Indian rupee ended weaker on Friday, posting its third straight week of losses, as concerns over slowing growth pushed domestic equities lower and as importers stepped up dollar buys for month-end payments.

Volumes in the dollar-rupee market were thin, with traders preferring to stay on the sidelines ahead of the year end.

The rupee ended at 52.9600/9675 to the dollar, weaker compared with Thursday’s close of 52.7200/7300. It had touched a high of 52.6350 in opening trades. The unit has lost 0.5% this week.

“RBI moves and the year-end factor have caused volumes to drop (in dollar-rupee trade)," said a senior foreign exchange trader at a large private sector bank.

“This situation is likely to continue till the new year begins. Until then rupee should move in 52 to 53 band," he said.

Although investors slightly increased their bearish bets against the Indian rupee compared to two weeks ago, a Reuters poll showed on Friday, many analysts think most potential negative factors have been taken into account.

“We believe that the depreciation momentum is petering out and the rupee should find a top around current levels of 52.50-53.50," said Abheek Barua, chief economist at HDFC Bank in a research note on Friday.

Barua added that the RBI’s recent steps to curb speculation have reduced volatility in dollar-rupee market and “the threat" of further action from the central bank, in case rupee weakened sharply from current levels, could itself “help to harness" the currency.

For details on steps taken by the RBI to curb the rupee’s volatility and increase inflows, see:

Indian shares ended 0.47% lower on Friday, after gaining for two consecutive sessions, on mounting worries over economic growth, with stocks expected to stay under selling pressure next week as well.

One-month offshore non-deliverable forward contracts were quoted at 53.43, suggesting some more short-term weakness in the onshore spot rate.

In the currency futures market, the most-traded near-month dollar-rupee contracts on the National Stock Exchange, the MCX-SX and the United Stock Exchange ended at 52.9800, 52.9750 and 52.9625 respectively. Total volume was at $2.74 billion.