Indian rupee snaps 4-week winning spree, slips to 61.86 against US dollar
Mumbai: The Indian rupee snapped its 4-week winning spree against the American currency, slipping 44 paise to 61.86 per dollar on month-end dollar demand from importers and banks.
The rupee resumed slightly lower at 61.49 per dollar as against the last weekend’s level of 61.42 and fell further to 62.03 on good dollar demand from importers and some banks.
However, it recovered afterwards to 61.29 on selling of dollars by exporters in view of strong foreign capital inflows into equity market as foreign portfolio investors (FPIs) infused a net USD 779.85 USD million during the week as per SEBI’s record.
The rupee ended at 61.86 per dollar as against the last weekend’s level of 61.42, showing a gain of 44 paise or 0.73 per cent. It moved in a range of 61.29 and 62.0350 per dollar during the week.
The domestic currency had gained by 215 paise or 3.38 per cent in the previous four weeks.
Meanwhile, the Indian benchmark sensex dropped by 95.89 points or 0.33 per cent to 29,182.95 after hitting an all-time high of 29,844.16.
Pramit Brahmbhatt, Veracity Group CEO said,” After appreciating for four weeks last week Rupee lost its way and depreciated by one percent during the week. The month end dollar demand from oil importers and corporates forced Rupee to trade weak and close at 61.86?. Also the local equities lost its ground last week and posted first weekly loss in three weeks which further dented the movement of Rupee.
The RBI advocated corporates to increase their hedge ratios to be better prepared for any turmoil in the exchange rate. Now investors are waiting for the RBI policy due on 3rd Feb which will help them to gauge the Rupee movement.
The rupee premiums on forward dollar dropped further on persistent receiving by exporters.
The benchmark six-month forward dollar premium payable in June dropped to 186-188 paise from the last weekend’s level of 192-194 paise and far-forward contracts maturing in December also moved down to 392-394 paise from 395.5-397.5 paise.
The RBI fixed the reference rate for the US dollar at 61.7575 and 70.0268 for euro respectively as against the previous weekend’s level 61.4988 and 69.6166 respectively.
The rupee also dropped to 93.33 per pound from the preceding weekend’s level of 92.00 and also declined to 70.22 per euro from 68.94 previously. It fell to 52.59 per 100 yen from 51.96 last week.
