Rupee falls to one-month low on share losses, oil demand
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)
- Tweet this
- Share this
- Digg this
- Xi sees factory China and back office India as global engine
- Fed could hint on rate-hike plans as it prepares for policy turn
- Google launches $105 Android One; eyes low-price smartphone boom
- Pakistani Islamists use floods to turn opinion against India
- Delayed retreat of monsoon rains to start this weekend
A combination of the "world's factory" and the "world's back office" will drive global economic growth, Chinese President Xi Jinping said ahead of a rare visit to India on Wednesday, playing down mistrust that has kept the Asian giants apart. Full Article
China cenbank injects $81 bln into major banks to support economy - reports Full Article