Rupee falls for 3rd day; down 9 paise Vs US dollar

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Agencies: Mumbai, Nov 22 2012, 19:16 IST

Tags: Rupee Vs US Dollar | Rupee Value | Banking News

The rupee fell for the third day in a row to close at fresh 2-1/2-month low of 55.21 against the dollar today, down by 9 paise following sustained dollar demand from importers.

However, firm stock markets and slightly weak dollar overseas amid continued foreign fund inflows capped the fall, a forex dealer said.

At the Interbank Foreign Exchange (Forex) market, the domestic currency commenced higher at 55.08 a dollar against previous close of 55.12 and immediately touched a high of 55.01 on strong local stocks and weak dollar overseas.

Emergence of dollar demand from importers, mainly oil refiners, to meet their month-end requirements weighed on the rupee and it fell back to a low of 55.27 before concluding at 55.21, a fall of nine paise or 0.16 per cent.

"The rupee reversed initial gains even after rising risk appetite in stock markets. The oil importers demand also checked the gains in the rupee," Pramit Brahmbhatt, CEO, Alpari Financial Services (India) said.

"The euro was trading slightly lower after the German and eurozone PMI figures continued to remain in contraction territory. The uncertainty prevailing in the eurozone puts pressure on the euro and subsequently on the rupee," India

Forex Advisors Abhishek Goenka CEO said.

The BSE benchmark Sensex today ended higher by 56.96 points or 0.31 per cent.

Foreign Institutional Investors (FIIs) pumped in USD 47.56 million yesterday, as per Sebi data.

The dollar index, a gauge of six major global rivals, was down by 0.04 per cent.

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Rupee up 11 paise against US dollar in early trade Rupee up 17 paise against US dollar in early tradeRupee trims early gains vs US dollar, still up by 17 paise Rupee pares early losses against US dollar, still down by 15 paise

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Control Imbalance in Trade

Madan Menon Thottasseri | 24-Nov-2012Reply | Forward

The trend for increased dollar demand in lieu of rupee had actually originated right from the beginning of the eurozone crisis. Since the economy had not released from adverse effect of spellbinding global meltdown, the low growth rate of manufacturing sector as well as the high rate of inflation further paved the way for rupee depreciation. The parking of export proceeds as dollar coffers in overseas envisaging further fall or rupee added fuel to the crisis. Simultaneously Foreign Institutional Investors have reduced their presence by taking investments out of India! Falling rupee had spontaneously increased the inflationary pressure hiking the prices of essential commodities. Despite an increase in rupee equivalent of dollars earned as export proceeds by E.O.Us and IT companies etc. the negative balance of trade had shown severe impact on the fiscal deficit. It is to be noted that while we have to assess India%u2019s forecast for accelerating export shipments to EU and U.S based on the current global scenario, mainly the eurozone crisis wherein the total debt of the 17 nations using the single currency have hit the highest level since the launch of Euro in 1999. It is an undeniable fact that there is a far-flung chance of immediate economic growth in EU and U.S that alone will make a conducive atmosphere to augment Indian exports to global importing centers or inflow of capital towards India. Unless we control the imbalance in trade, we cannot combat the volatility of rupee.