Indian rupee flat; lower retail inflation spurs rate cut hopes

Fri Apr 12, 2013 5:15pm IST

Related Topics

* 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:
Photo

After wave of QE, onus shifts to leaders to boost economy

DAVOS, Switzerland - Central banks have done their best to rescue the world economy by printing money and politicians must now act fast to enact structural reforms and pro-investment policies to boost growth, central bankers said on Saturday.

Barack Obama in India

Reuters Showcase

Coal Mining

Coal Mining

India to open coal to commercial mining firms soon, minister says  Full Article 

RBI Loan Rules

RBI Loan Rules

RBI relaxes overseas loan recast rules   Full Article 

E-commerce Firms

E-commerce Firms

Amazon, e-commerce rivals fuel commercial property boom in India  Full Article 

Growth Forecasts

Growth Forecasts

Indian economic growth forecasts pegged back, despite rate cuts: Reuters Poll.  Full Article 

Uber is Back

Uber is Back

Uber back in Delhi; govt says must await approval.  Full Article 

Markets at Record

Markets at Record

Sensex rises to record after ECB stimulus programme.  Full Article 

Pharma Sector

Pharma Sector

Ipca Labs hit by FDA ban on plant for standard violations.  Full Article | Related Story 

Forex Reserves

Forex Reserves

India FX reserves at record high as RBI fortifies defences  Full Article 

QE for Euro Zone

QE for Euro Zone

ECB launches 1 trillion euro rescue plan to revive euro economy.  Full Article 

Reuters India Mobile

Reuters India Mobile

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