At 52.15 a dollar,Re falls to 3-month low

The rupee lost 37 paise to close at an over 3-month low of 52.15/16 against the US dollar on sustained demand for the American currency from banks and oil importers

Written by ENS Economic Bureau | Mumbai | Published:April 20, 2012 12:56 am

The rupee lost 37 paise to close at an over 3-month low of 52.15/16 against the US dollar on sustained demand for the American currency from banks and oil importers.

The rupee closed at 52.14/52.15 to the dollar,close to the intraday low of 52.165,a level last seen January10. It had closed at 51.78/79 on Monday.

Some traders expect the Reserve Bank of India to sell some dollars near those resistance levels.

The rupee slid to its weakest level in more than three months,putting traders on alert for possible intervention from the RBI as the outlook on the currency stays bleak.

The widening current account deficit,caused in large part by rising oil prices,slowing growth,and fears of a spillover from the festering euro zone debt crisis are seen looming large for the rupee. The reduced expectations for further interest rate cuts from the RBI due to inflationary risks are also weighing on the rupee,traders said.

Dun & Bradstreet India Senior Economist Arun Singh said,“Cutting the policy rate at a time when inflationary expectations are quite high given the incomplete pass-through of the global oil prices along with factors like the rupee depreciation and the uptrend witnessed in the food prices,could fuel inflationary pressures further.”

Meanwhile,Dalal Street rose for a fourth consecutive session on Thursday,as auto stocks extended a rally and Infosys recovered from recent sharp losses,though caution remains amidst the earnings reporting season.

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