Rupee falls to one-month low on share losses, oil demand

MUMBAI Mon Jan 7, 2013 5:18pm IST

Indian currency of different denominations are seen in this picture illustration taken in Mumbai April 30, 2012. REUTERS/Vivek Prakash/Files

Indian currency of different denominations are seen in this picture illustration taken in Mumbai April 30, 2012.

Credit: Reuters/Vivek Prakash/Files

Related Topics

MUMBAI (Reuters) - The rupee fell to an over one-month low on Monday, extending its losing streak to a third session, dragged down by steady dollar demand from oil refiners and a fall in local stocks.

The recent bout of weakness in the rupee comes after data released last week showed the country's current account deficit widened to a record high in the September quarter and after Federal Reserve minutes last week were seen as casting doubt over future U.S. monetary stimulus.

Credit Suisse, despite calling India's economy in a "cyclical sweet spot", said it was hard to be 'structurally' optimistic about the rupee, given the large inflows required to produce a balance of payments surplus.

"The pressure on the rupee is from dilution in bearish undertone on the USD post Fed's halt to QE4 and fundamentals of the rupee with CAD (current account deficit) at over 5 percent being weak," said Moses Harding, head of asset-liability management at IndusInd Bank.

"Over all, the near-term outlook is for consolidation at 54-56 with bias into higher end."

The partially convertible rupee closed at 55.23/24 per dollar, weaker than its Friday close of 55.07/08. It had fallen to 55.32 during the session, its lowest since November 29.

Traders described solid greenback demand from oil companies during the session, which pressured the rupee. Indian stocks also snapped a four-day winning streak to fall for the first time in 2013, ending down 0.47 percent.

Still, foreign fund flows have continued to remain strong in India with $725 million of inflows in the week ended January 4, the highest among the Asia equity markets tracked by Nomura.

In the offshore non-deliverable forwards, the one-month contract was at 55.57 while the three-month was at 56.14.

In the currency futures market, the most-traded near-month dollar/rupee contracts on the National Stock Exchange, the MCX-SX and the United Stock Exchange all closed at around 55.4750 with a total traded volume of $4.95 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

REUTERS SHOWCASE

DLF Appeals

DLF Appeals

DLF seeks interim relief from capital market ban  Full Article 

Business Climate

Business Climate

Fears for tough penalties grow as India cleans up business  Full Article 

Falling Oil Prices

Falling Oil Prices

Indian consumers respond to softer oil, food prices  Full Article 

Pollution Levels

Pollution Levels

Delhi braces for worst air quality this Diwali week.  Full Article 

Fire Accident

Fire Accident

Firecracker market up in flames near Delhi  Video 

Yahoo Result

Yahoo Result

Yahoo ekes out Q3 revenue gain despite display ad weakness  Full Article 

Deal Talk

Deal Talk

Smartphone repair company B2X steps up expansion with Indian deal.  Full Article 

Reuters India Mobile

Reuters India Mobile

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