Rupee extends losses as shares fall; dollar gains

Rupee extends losses as shares fall; dollar gains

Mumbai: The Indian rupee extended its fall in afternoon trade on Thursday weighed by losses in domestic shares and tracking the dollar’s rise versus major currencies overseas.

At 1:40pm, the partially convertible rupee was at Rs46.57/58 per dollar, weaker than its previous close of Rs46.20/21.

Shares fell on Thursday as Asian markets weakened on doubts about the pace of global recovery and worries about the risk of steps to temper capital inflows weighed on sentiment.

Dealers said there were concerns over imposition of capital controls in Asia after Brazil took another step on Wednesday aimed at containing the appreciation of its currency, unveiling a 1.5% tax on certain trades involving American Depositary Receipts issued by Brazilian companies.

The dollar and the yen rose on Thursday as investors, watching soft equities performances and capital controls in emerging markets, closed out positions in riskier currencies and bought back the two low-yielders.

One-month offshore non-deliverable forward contracts were quoting at Rs46.60/70, weaker than the onshore spot rate.

In the currency futures market, the most traded near-month contracts on the National Stock Exchange and MCX-SX were quoting at 46.5625 and 46.5650 respectively, with the total traded volume on the two exchanges at about $1.7 billion.