Indian rupee flat; lower retail inflation spurs rate cut hopes

Fri Apr 12, 2013 5:15pm IST

Related Topics

Polluted waters of China

Polluted waters of China

Growing cities, overuse of fertilizers, and factory wastewater have degraded China's water supplies to the extent that half the nation's rivers and lakes are severely polluted.  Slideshow 

* Rupee ends flat at 54.52/53, unchanged from Wednesday's close

* March inflation data due on Monday

* Local shares fall, Infosys slumps

By Subhadip Sircar

MUMBAI, April 12 (Reuters) - The Indian rupee ended flat on Friday as a slump in local stocks after a weak revenue guidance from IT bellwether Infosys, was evened out by hopes the central bank would cut interest rates next month after data showed slowing consumer inflation.

The rupee gained a modest 0.5 percent for the week, which has been marked by concerns about outflows after foreign investors sold a net $37.29 million in equities in April and a net $510.57 million of debt, according to the latest available regulatory data.

Traders are looking ahead at wholesale price inflation on Monday which will be key in setting expectations ahead of the Reserve Bank of India's May 3 policy review, after cutting interest rates at each of its two previous meetings this year.

Wholesale prices have likely risen an annual 6.40 percent in March, a Reuters poll showed.

"The rupee gave up early gains as the stock markets fell on Infosys and the global dollar strength against other currencies. If the inflation data gives a positive surprise on Monday, it will build up rate cut hopes which will be positive for the currency," said Sudarshan Bhat, chief of currency trading at Corporation Bank.

The partially convertible rupee ended at 54.52/53 per dollar, unchanged from its close on Wednesday. Earlier in the session it had risen to 54.34, a 1-week high.

Currency markets were shut on Thursday for a local holiday.

Local shares recorded their biggest single-day fall since late February, after Infosys Ltd gave a much-lower-than-expected revenue guidance for 2013/14.

The rupee found some early support after data showed factory output rose more than expected in February, while retail inflation slowed in March.

In the offshore non-deliverable forwards, the one-month contract was at 54.82 while the three month was at 55.44.

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 about 54.68, with a total traded volume of $4.4 billion. (Editing by Sunil Nair)

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

Top News

REUTERS SHOWCASE

Kerry's India Visit

Kerry's India Visit

Kerry presses India on WTO deal ahead of arrival  Full Article 

Big Infra Deal

Big Infra Deal

Piramal, Dutch APG tie up for $1 bln infra investment  Full Article 

E-Commerce

E-Commerce

Amazon says to invest $2 billion more in India   Full Article 

Lupin Results

Lupin Results

Q1 net profit up 56 percent on higher U.S. drug sales   Full Article 

Twitter Results

Twitter Results

Twitter assuages growth concerns for now as shares soar 35 percent  Full Article 

Auto Sector

Auto Sector

VW closes in on Toyota as global auto leader  Full Article 

Fed Meeting

Fed Meeting

Fed seen trimming bond buys, could offer vague rate clues  Full Article 

Reuters India Mobile

Reuters India Mobile

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