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Rupee Slumps To Below 45 Level After 10 Weeks

Mumbai, Aug 9: Extending losses for the sixth straight session, the rupee today fell by 23 paise to close below the crucial 45 level for the first time in last 10 weeks against the dollar
PTI August 09, 2011 19:58 IST
PTI

Mumbai, Aug 9: Extending losses for the sixth straight session, the rupee today fell by 23 paise to close below the crucial 45 level for the first time in last 10 weeks against the dollar on sustained demand for the US currency from importers amid continued drubbing in stocks.  

After a see-saw trade at the Interbank Foreign Exchange market, the rupee closed down by 23 paise at 45.20/21. Heavy capital outflows too put pressure on the rupee as FIIs withdrew USD 838.34 million in five trading sessions since August 2.

The rupee opened sharply lower at 45.38/39 and touched a low of 45.40 in sync with a steep decline of over 558 points initially in the Bombay Stock Exchange benchmark Sensex. Earlier, it had touched an intra-day low of 45.42 on May 25, 2011.

However, a sharp recovery in Sensex, which was up by about 145 points in afternoon trade, helped the rupee bounce back to a high of 45.0750 only to settle at over a 10-week low of 45.20/21, a fall of 0.51 per cent.

In six sessions, it has depreciated by 113 paise or 2.56 per cent.

The Sensex closed down by 132.27 points or 0.78 per cent. “Today world stocks hit an 11-month low. Indian equities also closed down by about 0.8 per cent which depreciated the rupee by over half per cent. Investors were concern over the US economy, the euro zone debt crisis and higher inflation in China,” Alpari Financial Services (India) CEO Pramit Brahmbhatt said.

“The trading range for the USD/INR will be 45.00 to 45.50 tomorrow,” he added.

The dollar index was down against major rivals while New York crude oil was trading above USD 81 a barrel in European market today.

“The rupee was also tracking the grossly weak Asian currencies. It must be noted that with increased risk aversion in the markets investors are dumping risky assets and pumping their money in gold,” Abhishek Goenka, CEO, India Forex Advisors said.

The US credit rating downgrade was already discounted in the market yet the unprecedented debacle in the stock markets hit the rupee, he added.

The rupee premium for the forward dollar tumbled further on sustained heavy receivings by exporters. The benchmark six-month forward dollar premium payable in January dropped to 82-1/2-84-1/2 paise from Monday's close of 100-102 paise. Far-forward contracts maturing in July also plunged to 152-154 paise from 173-1/2-175-1/2 paise previously. The RBI fixed the reference rate for the dollar at Rs 45.1745 and the euro at Rs 64.2588.

The rupee declined further against the pound sterling to end at Rs 73.92/94 from last close of Rs 73.75/77 and also dipped to Rs 64.50/52 per euro from Rs 64.08/10 previously.

It tumbled against the Japanese yen to Rs 58.65/67 per 100 yen from Monday's close of Rs 57.80/82. PTI