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Indian rupee slips under 62 vs US dollar,posts biggest weekly loss in five

Indian rupee slipped against the US dollar as RBI interest rate hike fears led stocks lower.

Written by PTI | Mumbai |
December 13, 2013 6:29:05 pm

The Indian rupee slipped 29 paise to end below the 62 level against the US dollar today as rate hike fears led stocks lower,clocking its biggest weekly loss in five.

The Indian rupee is at the lowest level since December 3 after holding above the 62 level over a six-day stretch. It lost 71 paise decline over the past five sessions.

Check: NSE Nifty

There was pressure on the rupee after the dollar strengthened overseas as US retail sales gained momentum in November and ignited expectations the Federal Reserve would taper its bond-buying programme. The dollar index,a gauge of six major global rivals,was up 0.21 per cent.

Markets Top Gainers,Markets Top Losers

Stocks fell after government data yesterday showed retail inflation soared to a nine-month high of 11.24 per cent in November and factory output shrank 1.8 per cent in October.

At the interbank foreign exchange market,the rupee opened weak at 62.10 a dollar from the previous close of 61.83 and logged an intra-day high of 62.05.

It fell to a low of 62.28 before ending at 62.12,a loss of 29 paise or 0.47 per cent. In the past three days,it has tumbled 108 paise or 1.77 per cent.

“Poor data from India and robust report coming out from the US seem to have contributed to the weakness in the rupee today. The RBI has stated that the current elevated inflation rate is out of their comfort zone. This gives a hint that the central bank might take a hawkish stance once again,” said Abhishek Goenka,CEO of India Forex Advisors.

The 30-share benchmark S&P BSE Sensex plunged 210 points. Wholesale price index inflation data is scheduled for release on Monday,ahead of the Reserve Bank’s policy review on December 18.

Foreign institutional investors bought a net Rs 187.81 crore of shares yesterday,according to provisional data from the stock exchanges.

“Local equities closed down by 1 per cent,taking cues from the disappointing industrial production data,” said Pramit Brahmbhatt,CEO of Alpari Financial Services (India).

Forward dollar premiums recovered on fresh payments from banks and corporates.

The benchmark six-month forward dollar premium payable in May edged up to 246-248 paise from 245-247 paise previously and far-forward contracts maturing in November firmed up to 489-491 paise from 484-1/2 to 486-1/2 paise.

The RBI fixed the reference rate for the dollar at 62.1266 and for the euro at 85.4135.

The rupee bounced back to 101.14 against the pound from the overnight close of 101.38 and recouped to 59.92 per 100 Japanese yen from 60.15. It,however,moved down to 85.31 per euro from 85.14.

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