India rupee falls to near 1-week low; defence-related dollar buying rumoured
* Rupee ends at 54.175/185 per dlr vs 53.935/945 on Friday
* Dealers cite dollar demand by state-run banks for govt's defence buys
* Inflows related to Bharti Airtel's stake sale awaited
By Subhadip Sircar
MUMBAI, May 6 (Reuters) - The Indian rupee fell to its lowest in nearly a week on Monday on continued dollar demand from state-run banks, likely related to the government's defence purchases.
The fall in the currency comes on the back of Friday's weakness after the central bank disappointed markets with a hawkish tone at its annual monetary policy, despite delivering a widely expected 25-basis-point rate cut.
Dealers cited continued dollar buying, particularly by a large state-run bank, as the main trigger for the rupee's fall.
However, dealers are watching out for inflows related to some recent corporate deals which should provide some support for the rupee, particularly Qatar's $1.26 billion investment in Indian telecommunication company Bharti Airtel.
"I expect the rupee to move in a 53.60-54.80 band for now in the absence of any global developments or policy announcements. However, if the global dollar strength persists and 54.80 gets breached, the rupee may see a sharp downside," said Abhishek Goenka, chief executive at India Forex Advisors.
The partially convertible rupee closed at 54.175/185 per dollar, weaker than its close of 53.935/945 on Friday, its third successive session of falls. It fell to 54.2475 in session, a level last seen on May 1.
The euro was seen struggling against the dollar after surveys on Monday showed euro zone private sector activity faltered again in April, suggesting the region may fall deeper into recession this quarter. In the offshore non-deliverable forwards, the one-month contract was at 54.37 while the three-month was at 54.89.
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 around 54.26 with a total traded volume of $4.2 billion.
(Editing by Anupama Dwivedi)
- Tweet this
- Share this
- Digg this
- UPDATE 2-Concordia finally heads for scrapyard after massive salvage operation
- Seven arrests made in $1.6 million StubHub cyberfraud case |
- Facebook beats Wall Street targets, stock hits record high |
- UPDATE 3-SEC's long path to money market fund reform ends in compromise
- Two Ukrainian fighter jets shot down over rebel-held territory
India will not support a trade facilitation protocol ahead of a July 31 deadline unless its concerns about subsidies are met, two senior government officials said on Wednesday, sticking to a hard line critics say could derail a landmark global trade deal. Full Article
Bullish on Indian equities, but gains seen 'less sharp'- Goldman Sachs Full Article
Jet Airways chairman says looking to restructure debts, talking to bankers Full Article
Honda's India unit to account for 25 pct of Asia Pacific sales by March 2017 - exec Full Article