Rupee hits 12-week low on shares, euro slump

Rupee hits 12-week low on shares, euro slump

Mumbai: The Indian rupee fell further on Wednesday afternoon, hitting its weakest level in 12 weeks as the euro slumped to fresh four-year lows and as domestic shares fell nearly 3% raising concerns about rising risk aversion.

At 3:10pm, the partially convertible rupee was at Rs46.28/29 per dollar after hitting Rs46.3450, its weakest since 25 February and 1.5% below Tuesday’s close of Rs45.60/61.

The euro fell to a four-year low against the dollar on Wednesday after Germany banned naked short-selling of some securities, while comments by the German chancellor further undermined confidence in the currency.

Indian shares fell more than 2.8%, with financials leading the decline, as world stocks dropped on risk aversion after Germany sharpened financial regulation.

Dealers said sporadic dollar selling was seen from exporters but the pressure on the rupee to weaken was too large.

One-month offshore non-deliverable forward contracts were quoted at 46.42, weaker than the onshore spot rate.

In the currency futures market, the most traded near-month dollar-rupee contracts on the National Stock Exchange and MCX-SX were both at 45.2975 with the total traded volume on the two exchanges at about $6.9 billion.