Indian rupee falls for 9th week, closes in on record low

Fri Jul 5, 2013 5:12pm IST

Related Topics

* Rupee ends at 60.2250/2350 vs 60.13/14 Thursday close

* RBI seen selling dollars via state-run banks from 60.59 levels - dealers

* Rupee falls for a 9th successive week, down 1.4 pct

By Subhadip Sircar

MUMBAI, July 5 (Reuters) - The Indian rupee fell on Friday to approach a record low on sustained dollar demand from importers, forcing the central bank to intervene to support the currency, according to traders.

The Reserve Bank of India was cited selling dollars via state-run banks after the rupee fell to the day's low of 60.59, not far from its life low of 60.76 touched on June 26.

However, the central bank's intervention has not been strong during the current bout of rupee weakness, with Governor Duvvuri Subbarao's comments on Thursday about the RBI not targeting any particular exchange rate also deepening the uncertainty.

In the near-term, investors will closely watch the U.S. monthly employment data due out later in the day. Analysts expect U.S. job growth to have slowed in June, but not enough to shift the Federal Reserve away from expectations that it will start scaling back its massive monetary stimulus later this year.

Markets are also awaiting potential measures from the government to open up more sectors for foreign investment in a bid to narrow a record high current account deficit that has now helped send the rupee to a ninth consecutive weekly fall.

"The rupee's outlook is still negative. The government is not coming up with any strong response. Oil prices are going up, which may widen the current account deficit," said Subramanian Sharma, director at Greenback Forex.

The partially convertible rupee closed at 60.225/235, compared with its previous close of 60.13/14.

The rupee fell 1.4 percent for the week and its nine-week losing streak is the longest since the last one ended June 3, 2012.

Analysts feel that the government and central bank will be forced to unveil new steps if the rupee does not stop its slide.

An overseas bond issue targeted at non-resident Indians is one of the options the government has, while the central bank can again open a dollar window for oil refiners to take a big chunk of dollar demand out of the market.

In the offshore non-deliverable forwards, the one-month contract was at 60.64, while the three-month was at 61.30.

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 60.58 with a total traded volume of $5.6 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

Canada Shooting

Canada Shooting

Attack on parliament, killing of soldier stun Canada's capital.  Full Article 

Earnings Season

Earnings Season

Wipro sees rosier end to year as U.S. clients spend.  Full Article 

Business Climate

Business Climate

Fears for tough penalties grow as India cleans up business  Full Article 

New Email Service

New Email Service

Google launches new email service dubbed "Inbox".  Full Article 

DLF Appeals

DLF Appeals

DLF seeks interim relief from capital market ban  Full Article 

Falling Oil Prices

Falling Oil Prices

Indian consumers respond to softer oil, food prices  Full Article 

Book Keeping

Book Keeping

RBI fires warning shots on companies' lack of FX hedging.  Full Article 

Policy Repo Rate

Policy Repo Rate

Most external members suggested rate cut in RBI's Sept review.  Full Article 

Reuters India Mobile

Reuters India Mobile

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