Falling for the eighth successive session, the rupee on Wednesday slumped to nearly two-year low of 48.01 in early trade as lingering eurozone debt worries prompted importers, oil refiners and banks to make a beeline for buying the U.S. dollar.
Ruling out any problem on domestic fundamentals, treasury managers in banks attributed the rupee’s steep fall to the 48-level to international developments.
The decline in rupee’s exchange value is however seen as a blessing in disguise for exporters who said they will “definitely benefit” and “it is a good news for them“.
Share prices of Indian software exporters such as TCS, Infosys, and Wipro, who earn major chunk of revenue from the U.S. in dollar, shot up on the BSE as a weak rupee will improve their bottomlines.
After the steep fall in morning trade the domestic currency rebounded to end the day 5 paise lower at 47.64/65.
Dealers said weak dollar overseas too helped the late rupee recovery.
At the Interbank Foreign Exchange (Forex) market, the local unit opened sluggish at 47.80/81 a dollar from overnight close of 47.59/60.
Taking a cue from bearish equities, it immediately touched nearly a two-year low of 48.01, level not seen since September 29, 2009, when it had touched a low of 48.11.
However, host of positive factors like, smart reversal in local equities, increased capital outflows amid feeble dollar overseas later supported the rupee and it bounced back to a high of 47.5950 before concluding at 47.64/65.
In straight seven sessions of losses, the rupee has tanked by 185 paise or 4.04 per cent.