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Indian rupee hits over 11 months low vs US dollar,may touch 57-mark

Tracking massive fall in equities,rupee declined by 12 paise to end at 11-month lows of 56.50.

Written by PTI | Mumbai | Published: May 31, 2013 7:58:57 pm

Tracking massive fall in equities,the rupee today declined by 12 paise to end at 11-month lows of 56.50 against the US dollar amid worries over current account deficit and GDP growth.

Rupee commenced lower at 56.50 from previous close of 56.38 at the Interbank Foreign Exchange (Forex) market today.

With FII outflows of USD 90 million in stocks,RBI’s poor inflation outlook and GDP falling to decade’s low pushed the rupee downwards to 56.76 – its lowest since June 28,2012.

Rupee concluded at its opening level of 56.50 – a fall of 12 paise or 0.21 per cent.

Dollar demand related to defence payments and month-end imports also hurt rupee,forex dealers said. However,there were no reports of RBI intervention,they added.

During the week,it has plunged by 87 paise or 1.56 per cent. For month of May,it has fallen by over 4.8 per cent – the worst monthly decline in 12 months.

“Throughout the week we saw the rupee weakening against the US dollar and surpassing the key levels of 56-56.20. Yesterday,RBI’s reality check on inflation and CAD jolted the sentiment. India’s Q4 GDP figure has come in line with market

expectations…We expect rupee to move towards 57-58 levels,” said Abhishek Goenka,Founder & CEO,India Forex Advisors.

Due to poor performance of farm,manufacturing and mining sectors,GDP growth slowed to 4.8 per cent in January-March quarter and fell to a decade’s low of five per cent for the entire 2012-13 fiscal.

The dollar index was up by 0.31 per cent against a basket of six major global rivals ahead of a slew of global economic data due later in the day.

Pramit Brahmbhatt,CEO,Alpari Financial Services (India) said: “Today for the fourth session,rupee continued to trade low against dollar as Indian shares closed down by 2.25 per cent.” Meanwhile,benchmark S&P BSE Sensex today tanked by 455.10 points.

Today’s 12-paise loss against the US dollar extends rupee’s losing to the fourth consecutive day. Rupee touched its record intra-day low of 57.37 a dollar on June 22,2012.

In the futures market,rupee is close to its all-time lows,said analysts.

“Taking cues,rupee crossed the psychological figure of 57.00 in futures trading. Resistance for USD-INR (Spot) pair is at 56.85,” Brahmbhatt of Alpari said.

Meanwhile,premium for forward dollar softened further on sustained receipts by importers. Benchmark six-month forward dollar premium payable in November eased to 168-170 paise from last close of 169-1/2-171/1-2 paise.

Far-forward contracts maturing in May also moved down to 333-335 paise from 334-336 paise.

The RBI fixed the reference rate for the US dollar at 56.4958 and for the euro at 73.6807.

The rupee continued to rule weak against pound sterling to end at 85.97 from Thursday’s close of 85.28. It also moved down further against the euro to 73.39 from 73.07.

Rupee dipped against against the Japanese yen to 56.33 per 100 yen from 55.49.

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