Rupee ends two days of gains on share weakness, growth worries

MUMBAI Thu Dec 27, 2012 5:46pm IST

An employee sorts rupee notes at a cash counter inside a bank in the northeastern Indian city of Agartala February 18, 2010. REUTERS/Jayanta Dey/Files

An employee sorts rupee notes at a cash counter inside a bank in the northeastern Indian city of Agartala February 18, 2010.

Credit: Reuters/Jayanta Dey/Files

Related Topics

MUMBAI (Reuters) - The rupee fell after two sessions of gains on Thursday, tracking lower stocks and as oil refiners bought dollars, with the local currency headed to end the year with losses.

Concerns about slowing growth continue to dog the rupee's fortunes with policy makers raising doubts about whether the once red-hot economy can even muster an 8 percent average growth.

Prime Minister Manmohan Singh dubbed a five-year plan for average growth of 8 percent "ambitious" and warned that business-as-usual policies won't deliver higher growth.

The rupee's outlook over the next few days could be determined by global currency movements as efforts to solve the so-called U.S. "fiscal cliff" are expected to continue, although the unit could see some support from dollar sales by exporters.

"We might see some (dollar) sales in the last two days as some bunched up EEFC funds are likely to hit the market," said Hari Chandramgathan, chief forex dealer at South Indian Bank, referring to dollars that exporters park in designated accounts.

The partially convertible rupee closed at 54.93/94 per dollar versus its Wednesday close of 54.8350/8450. It traded in a 54.72-54.9850 range in the session.

Local shares gave up early gains to end lower on the back of volatility tied to the expiry of monthly derivatives at the end of the session. .BO

End-of-month dollar purchases by oil refiners also weighed on the rupee.

The rupee remains the third worst performer among Asian currencies in 2012 tracked by Reuters after the Japanese yen and Indonesian rupiah.

The weakness also reflects worries about India's current account and fiscal deficits, which helped send the rupee to a record low in June, and comes in spite of capital inflows that have topped $24 billion in 2012, with over $4 billion in December alone.

In the offshore non-deliverable forward market, the one-month contract was at 55.21 while the three-month was at 55.73.

In the currency futures market, the most-traded near-term dollar/rupee contracts on the National Stock Exchange, the MCX-SX and the United Stock Exchange closed at around 55.25 with a total traded volume of $3.2 billion.

(Editing by Subhranshu Sahu)

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

Public Health

REUTERS SHOWCASE

Cost Cutting

Cost Cutting

PM Narendra Modi boots officials out of the first class cabin  Full Article 

Airtel Profit Jumps

Airtel Profit Jumps

Bharti Q2 net profit more than doubles   Full Article 

Leisure Riding

Leisure Riding

Harley-Davidson woos affluent young Indians with bike culture  Full Article 

Maruti Earnings

Maruti Earnings

Maruti Suzuki net profit up 29 percent, beats estimates.  Full Article 

ICICI Results

ICICI Results

ICICI Bank Q2 profit up 15 percent, beats estimates.  Full Article 

Moody's on India

Moody's on India

Moody's welcomes India's policy steps, but wants to see more.  Full Article 

End Of QE

End Of QE

U.S. Fed ends bond buying, exhibits confidence in U.S. recovery.  Full Article 

Cook Comes Out

Cook Comes Out

Apple's Cook: "I'm proud to be gay"  Full Article 

Refining Margins

Refining Margins

BPCL aims to double refining margins with refinery expansion.  Full Article 

Reuters India Mobile

Reuters India Mobile

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