Indian rupee edges up; but RBI comments dent sentiment

Thu Jul 4, 2013 5:15pm IST

Related Topics

* Rupee ends at 60.13/14 vs 60.215/225 Wednesday close

* India cbank chief says not to protect any particular FX rate

* INR seen rising around 4 pct to 57.50 in 12 months - Reuters poll

By Subhadip Sircar

MUMBAI, July 4 (Reuters) - The Indian rupee eked out minor gains on Thursday, snapping three sessions of losses, but sentiment was dented after the Reserve Bank of India chief said the bank would not defend any particular exchange rate, which dealers read as likely absence of any heavy intervention.

RBI chief Duvvuri Subbarao's comments on the exchange rate, which would be read as innocuous in other circumstances, led to a sharp sell-off in the rupee, which the market took as a signal that any significant intervention was unlikely despite the currency hovering near record lows.

The absence of any strong comments from the governor to support the rupee was also a dampener for the markets, dealers said.

The rupee is likely to take its next cue from the U.S. non-farm payrolls data, due Friday, which will be an important data point for the Federal Reserve's decision to slow down its bond purchases.

"The RBI governor's comments on not protecting any particular rupee levels and concerns on the deficit did not go down well with the currency market," said Uday Bhatt, a senior manager at UCO Bank.

"The non-farm payrolls data will be the key. If it's strong, the rupee may see 61 levels."

The rupee was supported by a strong stock performance with local stocks gaining 1.2 percent.

The partially convertible rupee closed at 60.13/14, compared with its previous close of 60.215/225. It fell to as much as 60.38 after the governor's comments.

The battered Indian rupee will remain under pressure against the U.S. dollar over the next year as a wide current account deficit and policy inaction dissuades foreign investment into the country, a Reuters poll showed.

In the offshore non-deliverable forwards, the one-month contract was at 60.51, while the three-month was at 61.21.

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 60.46 with a total traded volume of $4.9 billion. (Editing by Anand Basu)

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

School Shooting

School Shooting

Two killed, four wounded in Washington state school shooting.  Full Article 

Sundar Pichai Elevated

Sundar Pichai Elevated

Google's Pichai to oversee major products and services.  Full Article 

Need For Reforms

Need For Reforms

Euro zone risks "relapse into recession" without structural reforms - Draghi.  Full Article 

Diwali Sales

Diwali Sales

Gold sales jump about 20 pct for Diwali - trade body  Full Article 

World Bank Rival

World Bank Rival

Three major nations absent as China launches W.Bank rival in Asia  Full Article 

Wal-Mart India

Wal-Mart India

Murali Lanka appointed as Wal-Mart India operations chief  Full Article 

Health Of Lenders

Health Of Lenders

25 European banks set to fail health checks - sources.  Full Article 

Special Report

Special Report

Why Madrid's poor fear Goldman Sachs and Blackstone  Full Article 

India Insight

India Insight

Kalki Koechlin on her role as a disabled girl in “Margarita, With a Straw”  Full Article 

Reuters India Mobile

Reuters India Mobile

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