Rupee hits over 11-month low; down 26 paise on dollar demand
Continuing its free fall for the fifth straight session, the rupee today slumped by 26 paise to hit a new 11-month low of 56.76 on fag-end dollar buying and capital outflows from local equities.business Updated: Jun 03, 2013 19:26 IST
Continuing its free fall for the fifth straight session, the rupee on Monday slumped by 26 paise to hit a new 11-month low of 56.76 on fag-end dollar buying and capital outflows from local equities.
Forex dealers said bleeding domestic stocks and a weakening bond market firming up the dollar in turn, weighed upon the rupee.
Foreign institutional investors pulled out Rs 86.66 crore from local stocks on Monday, as per provisional BSE data.
"The pressure on rupee was mainly built due to fag-end buying by some foreign banks and importers. Bond markets were seen slumping, which in turn pushed up the dollar and hit the local currency."
"Capital outflows by FIIs, coupled with weakening stocks also marred the rupee sentiment," said Srinivasa Raghavan, executive vice-president (treasury) at private-sector Dhanlaxmi Bank.
The rupee commenced weak on Monday at 56.55, below Friday's close of 56.55 against the dollar at the Interbank Foreign Exchange (Forex) market.
It hovered in a range of 56.40-56.83 before before settling at 56.76, a fall of 26 paise, or 0.46% from its previous close. Rupee has fallen by nearly 120 paise in the last five days.
This comes precariously close to rupee's all time low of 57.32 touched last June-end.
The dollar index, a gauge of six major global rivals, was down by 0.18%.
Pramit Brahmbhatt, CEO, Alpari Financial Services (India) said that major resistance for USDINR (Spot) pair is set at 57.00. "The trading range for the same is expected to be within 56.45 to 56.95," he added.
"In spite of dollar weakness and recovery in euro, rupee depreciated, showing internal demand pressure. The hawkish statement by the RBI governor (D Subbarao) has turned the sentiment for rupee, helping it to touch 56.81 levels," consulting firm India Forex Advisors said in a statement.
Meanwhile, the BSE benchmark Sensex closed 149.82, or 0.76% lower at 19,610.48 on Monday.
Meanwhile, premium for forward dollar remained weak on continued receipts by importers. Benchmark six-month forward dollar premium payable in November dropped to 162-1/2-164-1/2 paise from 168-170 paise.
Far-forward contracts maturing in May also dipped to 321-1/2-323-1/2 from 333-335 paise.
The RBI fixed the reference rate for the US dollar at 56.5740 and for the euro at 73.6405.
The rupee continued its decline against pound sterling to 86.55 from 85.97. It also plunged against the euro to 73.78 from 73.39.
Rupee too declined against against the Japanese yen to 56.52 per 100 yen from 56.33.