India rupee falls as monsoon, swine flu woes loom

Wed Aug 12, 2009 5:53pm IST

Related Topics

* Strong factory output help rupee off two-week low

* Pull back in shares from over 2 pct fall also helps

* Traders await monsoon forecast update on Thursday (Updates to close)

By Swati Bhat

MUMBAI, Aug 12 (Reuters) - The Indian rupee fell on Wednesday as deficient monsoon rains and worries over the spread of swine flu weighed, but it crawled back from two-week lows after the stock market trimmed sharp losses.

The partially convertible rupee INR=IN ended down 0.8 percent at 48.37/38 per dollar after hitting 48.50, its lowest since July 30, compared with Tuesday's close of 47.97/98.

"There was dollar buying by foreign institutional investors. The industrial output figure was better than expected but the impact was not much on account of worries about the monsoon and swine flu," said Puneet Sharma, chief foreign exchange dealer at state-run Allahabad Bank.

June industrial output expanded at its fastest pace in 16 months, beating forecasts by a wide margin, as higher salaries of government employees and stimulus spending boosted consumer demand. [ID:nBOM167869]

H1N1 pandemic flu is spreading in India, Thailand and Vietnam with the onset of Asia's monsoon season, the World Health Organisation (WHO) said on Tuesday. [ID:nLB713194]

Dealers said they would watch the monsoon forecast update on Thursday for clues of the impact on the broader economy.

"The outlook is rupee positive. The monsoon data tomorrow may be somewhat better than what we have seen so far. I expect the rupee to open around 48.25 levels and then the overnight dollar moves and Asian stocks would provide direction," Sharma said.

The monsoon rainfall deficit widened by one percentage point from the previous day to 29 percent on Aug. 10, with rains in the soybean-growing central region weakening. [ID:nISL372941]

One-month offshore non-deliverable forward contracts PNDF were at 48.39/49, marginally weaker than the onshore spot rate.

In the currency futures market, the most traded near-month contract on the National Stock Exchange and MCX-SX closed at 48.4025 and 48.4150 respectively, with the total traded volume on the two exchanges at a high $2.2 billion. (Editing by Ranjit Gangadharan)

FILED UNDER:
Comments (0)
This discussion is now closed. We welcome comments on our articles for a limited period after their publication.

  • Most Popular
  • Most Shared

Pharma

REUTERS SHOWCASE

Jan Dhan Yojna

Jan Dhan Yojna

Modi: Banking for all to end "financial untouchability".  Full Article 

Power Outage

Power Outage

India may face blackouts as coal shortage cuts power output  Full Article 

Moody's on Inflation

Moody's on Inflation

Persistent inflation hurting India's sovereign ratings - Moody's  Full Article 

Tracking Monsoon

Tracking Monsoon

Monsoon forecast to be better for crops next week  Full Article 

Carmichael Project

Carmichael Project

Adani buys Australia coal mine royalty rights from Linc for $145 million  Full Article 

GDP Preview

GDP Preview

Economy likely grew faster in June quarter: Reuters poll.  Full Article 

India-Japan Meet

India-Japan Meet

Modi eyes breakthrough nuclear pact on Japan trip   Full Article 

Monetary Policy

Monetary Policy

BofA says RBI may cut rates by 75-100 bps starting early 2015  Full Article 

Rare Earth Output

Rare Earth Output

India to chip in with 5 pct of global rare earth output  Full Article 

Reuters India Mobile

Reuters India Mobile

Get the latest news on the go. Visit Reuters India on your mobile device.  Full Coverage