Rupee falls by nine paise to 60.22 vs dollar on importer demand
After a day's respite, the rupee today declined by nine paise to 60.22 in volatile trade on fresh dollar demand from importers even as RBI possibly intervened to arrest the slide in the local currency.business Updated: Jul 05, 2013 18:38 IST
After a day's respite, the rupee on Friday declined by nine paise to 60.22 in volatile trade on fresh dollar demand from importers even as RBI possibly intervened to arrest the slide in the local currency.
The drop was also limited by fresh capital inflows and firm local stocks. The rupee resumed at 60.06 a dollar from the previous close of 60.13 on the Interbank Foreign Exchange (Forex) market and reached a high of 60.00 as local stocks climbed and exporters sold dollars.
The rupee then dropped to a low of 60.59 amid renewed dollar demand from importers, a strong dollar overseas and late profit booking in stocks. The rupee regained some ground to close at 60.22, a decline of 0.15%.
"Possibly, there was intervention from the Reserve Bank around the 60.58/59 level, which helped the rupee to recover," said Hemal Doshi, a currency strategist at Geojit Comtrade. The benchmark S&P BSE Sensex, which added 229 points at mid-session, ended with a gain of 85 points, or 0.44%. The dollar index, consisting of six major global rivals, was up by 0.20% after the European Central Bank and the Bank of England each indicated there were no plans to reduce stimulus immediately.
"The dollar rallied across the board yesterday after the dovish comments made by both the European Central Bank President Mario Draghi and new Bank of England Governor Mark Carney," said Pramit Brahmbhatt, CEO, Alpari Financial Services (India).
"It extended its strength today also against other major currencies, forcing the rupee to depreciate." On a weekly basis, the rupee extended its fall for the ninth straight time -- one of its longest losing streaks.
"The rupee was seen trading in the range of nearly 60 paise today. It was trading on a weaker note taking cues from the global factors where the Dollar index was seen trading above its one month high. Later, the rupee was seen gaining some strength against the US dollar as there was a selling pressure in the market," said Abhishek Goenka, Founder and CEO, India Forex Advisors.
Today's US Non-Farm Employment data will be very significant for the further trend in the US dollar and rupee, he added.
Meanwhile, premium for forward dollar declined further on sustained receipts by exporters.
Benchmark six-month forward dollar premium payable in December softened to 171-172-1/2 paise from Thursday's close of 172-1/2-174-1/2 paise.
Far-forward contracts maturing in June also eased to 348-350 paise from 349-1/2-351-1/2 paise.
RBI fixed the reference rate for the US dollar at 60.3395 and for the euro at 77.8085.
Rupee improved further against the pound sterling to 90.18 from previous close of 90.74 and also firmed up against the Japanese yen to 60.21 per 100 yen from 60.27.
However, bounced back against the euro to 77.56 from last close of 78.17.