Rupee down 19 p on poor IIP data, trade deficit

Comments 0
SummarySnapping its three-day upmove, the rupee on Friday depreciated 19 paise to close at 54.76 against the US dollar on weak industrial production data and rising trade deficit due to fall in exports.

Snapping its three-day upmove, the rupee on Friday depreciated 19 paise to close at 54.76 against the US dollar on weak industrial production data and rising trade deficit due to fall in exports. Better dollar overseas also weighed on the rupee while consistent foreign funds inflow in stocks restricted the fall to some extent, said forex dealers.

At the Interbank Foreign Exchange (Forex) market, the local unit commenced strong at 54.40, which was also to be the day’s high, as against previous close of 54.57. This initial buoyancy was on the back of strong equities at initial stages on better-than-expected third quarter results by Infosys.

Rupee later fell back in line with domestic stocks following steep fall in industrial production data and rise in trade deficit to touch a low of 54.84. It ended at 54.76, showing a fall of 19 paise or 0.25%.

In last 3 days, it had gained 66 paise or 1.2%. “Rupee was seen depreciating against dollar today after weaker November IIP figures came out at -0.1%. In the last few sessions, rupee had gained on account of flows in the markets and dollar index weakening internationally,” said Abhishek Goenka, Founder & CEO, India Forex Advisors.

The dollar index, a gauge of six major global currencies, was up by 0.03% in late trades. India’s exports contracted by 1.9% in December to $24.88 billion, down for the eighth month in a row due to demand slowdown in the US and Europe.

Trade deficit, which represents an outflow of domestic currency, stood at $17.6 billion. Meanwhile, the Indian benchmark Sensex, which was up by 176 points at initial stages, closed almost unchanged on Friday. Foreign Institutional Investors (FIIs) pumped in R249.50 crore on Thursday, as per provisional data with bourses.

The premium for the forward dollar declined further on sustained receipts by exporters. The benchmark six-month forward dollar premium payable in June ended weak at 164-166 paise from Thursday’s close of 166-168 paise. Far-forward contracts maturing in December also eased to 314-316 paise from 315-317 paise.

Ads by Google

More from Money & Funds

Reader´s Comments
| Post a Comment
Please Wait while comments are loading...