Indian rupee continues to downslide for 2nd straight week, falls 81 paise

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Mumbai | Updated: March 14, 2015 3:28:10 PM

The rupee continued its downslide for the second straight week and closed lower by a whopping 81 paise at two-month low of 62.97 against...

Indian rupee, us dollar, Indian rupee vs us dollaThe RBI fixed the reference rate for the US dollar at 62.6733 and Euro at 66.4212 from last weekend level of 62.2015 and 68.6020, respectively. Reuters

Forex: The rupee continued its downslide for the second straight week and closed lower by a whopping 81 paise at two-month low of 62.97 against the American currency on heavy dollar demand from importers and exporters on the back of a firm USD overseas.

Steep fall in local equities with the benchmark S&P BSE Sensex registering its biggest fall of 945.65 points, or 3.21 per cent, in current calender year also weighed on the rupee while capital inflows could not stem the rupee fall, a forex dealer said.

The dollar gained as strong payrolls data raised bets of a Fed rate hike, as early as summer. This pushed the dollar index to fresh 11-year high.

At the Interbank Foreign Exchange (Forex) market, the rupee started the week bearish at 62.60 against last Thursday’s close of 62.16 and moved in negative territory throughout the week.

It moved in a range of 62.4925 and 63.0025 before ending the week at 62.97, exhibiting a steep fall of 81 paise, or 1.30 per cent.

Last week, it had dropped by 33 paise, or 0.53 per cent.

The rupee recovered on Thursday by 28 paise in step with smart recovery in local equities amid weak dollar overseas, another forex dealer said, adding that IMF upping India growth forecast and Insurance Bill passage in Parliament also boosted sentiments.

The benchmark S&P BSE Sensex plummeted by 604.17 points, or 2.05 per cent, logging its biggest fall in last two months while Foreign Portfolio Investors (FPI) picked up shares worth USD 139.16 million during the first four days of the week, as per Sebi data.

Veracity Group CEO Pramit Brahmbhatt said,” Rupee depreciated during the week as dollar continued to trade strong, boosted by better-than-expected US data which raised speculation over hike in interest rates around middle of the year.

“Local equities also closed on a weak note during the week which further hammered the rupee to depreciate over 1.25 per cent. The trading range for the spot rupee is expected to be within 62.50 to 63.50.”

Forward dollar premium dipped further on continued receipts by exporters.

The benchmark six-month forward dollar premium payable in August moved further to 222.5-224.5 paise during the week from 231-233 paise from the last weekend’s level and far-forward contract maturing in February 2016 also tumbled to 439-441 paise.

The RBI fixed the reference rate for the US dollar at 62.6733 and Euro at 66.4212 from last weekend level of 62.2015 and 68.6020, respectively.

Meanwhile, the rupee continued to rule firm against the pound sterling to end the week at 93.33 from last Friday’s level of 94.72 and also zoomed further to 66.66 per euro from 68.67.

It, however, reacted slightly downwards to 51.85 per 100 Japanese yen from preceding weekend’s level of 51.74.

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