Continuing its decline for the fourth straight session, the rupee on Friday tumbled by 30 paise to touch a fresh two-and-a-half-month low of 55.51 against the U.S. dollar on sustained demand for the American currency from importers and some banks.
Forex dealers said the rupee sentiment was hit by investor concerns over economic reforms as Parliament was adjourned for the second day on Friday.
Even sustained capital inflows and weak dollar overseas could not able to stem the rupee fall, they added.
The domestic unit opened a tad higher at 55.20 at the Interbank Foreign Exchange (Forex) market against the dollar from last close of 55.21 and immediately touched a high of 55.18 on early rise in local equities.
However, it failed to maintain the upward momentum and fell back sharply to a low of 55.61 on continued month-end dollar demand from importers, mainly oil refiners, and some banks. It finally closed at 55.51, a net loss of 30 paise, or 0.54 per cent, from its last close.
The rupee has plunged by 45 paise, or 0.82 per cent, in the last four sessions. The last time rupee plunged to this level was on September 6 when it had settled at 55.66.
“Volatility in the euro which fell below 1.29 today from 1.36 in the beginning of the week against the dollar and widening of the domestic trade deficit mainly weighed down on the rupee. Import bills of oil going up also hit the local unit,” Dhanlaxmi Bank Executive Vice-President (Treasury) Srinivasa Raghavan said.
The dollar index was down by 0.12 per cent against a basket of six major rivals, while New York crude oil was quoting above USD 87 a barrel in Europe on Friday.
“The rupee continued to weaken on political ruckus created in Parliament defying the positive sentiments of global markets due rising risk on,” Alpari Financial Services (India) CEO Pramit Brahmbhatt said.
Meanwhile, the BSE benchmark Sensex today declined by 10.77 points to 18,506.57. FIIs injected USD 33.13 million yesterday as per Sebi data.
Keywords: Forex markets, Indian Rupee, U.S. Dollar
We can assess India’s forecast for accelerating export shipments to EU
and U.S based on the current global scenario, mainly the eurozone
crisis wherein the total debt of the 17 nations using the single
currency have hit the highest level since the launch of Euro in 1999.
India has a far-flung chance of immediate economic growth in EU and
U.S that alone will make a conducive atmosphere to augment Indian
exports to global importing centers or inflow of capital towards
India. Unless we control the imbalance in trade, we cannot combat the
volatility of rupee.
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