Rupee falls for third day; foreign fund inflows key

MUMBAI Wed Apr 23, 2014 5:33pm IST

A cashier counts Indian rupee currency notes inside a bank in Mumbai August 5, 2013. REUTERS/Danish Siddiqui/Files

A cashier counts Indian rupee currency notes inside a bank in Mumbai August 5, 2013.

Credit: Reuters/Danish Siddiqui/Files

Related Topics

MUMBAI (Reuters) - The rupee weakened for a third consecutive session on Wednesday, falling below the 61 to the dollar mark for the first time in more than a month, hurt by good demand for the greenback from importers and by continued weakness in Asian currencies.

Most emerging Asian currencies fell as the Chinese yuan extended its recent decline to a 16-month low, while the Indonesian rupiah touched its weakest level in more than seven weeks due to increasing month-end dollar demand.

Traders said the direction of foreign fund flows in the near term will remain crucial to determine the rupee's fortunes, as India continues with its five-week-long elections for which the outcome will not be unveiled until mid-May.

For now, foreign investors have remained buyers with net purchases of a modest $30.80 million on Tuesday, marking a third consecutive day of inflows.

"The rupee is fragile currently and the same is expected to continue till the election result. It is likely revolve around the 60.50 to 61.50 band until May 16," said Shakti Satapathy, a senior strategist with AK Capital.

"Though a stable political regime would give some short-term respite, the fiscal strategies of the new government would remain crucial in determining the future trend for it".

The partially convertible rupee closed at 61.07/08 per dollar compared with its close of 60.76/77 on Tuesday. The unit fell as low as 61.19 intraday, its weakest since March 21.

Continued importer demand for dollars this week has helped offset the impact from rising domestic shares, which hit a record high for a third session in a row on Wednesday.

In the offshore non-deliverable forwards, the one-month contract was at 61.48 while the three-month was at 62.30.

(Editing by Anupama Dwivedi)

FILED UNDER:

REUTERS SHOWCASE

WTO Trade Deal

WTO Trade Deal

WTO clinches first global trade deal in its history  Full Article 

Kashmir Attack

Kashmir Attack

Ten dead in Kashmir's worst militant attack in more than a year  Read 

OPEC Meeting

OPEC Meeting

Saudis block OPEC output cut, oil price sinks further.  Full Article 

GDP, RBI Preview

GDP, RBI Preview

GDP growth set to weaken, business wants reforms more than rate cut  Full Article | Related Story 

Social Media

Social Media

Twitter to start tracking users' mobile apps  Full Article 

Jaitley to Rajan

Jaitley to Rajan

Jaitley likely to meet Rajan on Monday to urge rate cut  Full Article 

Banking Sector

Banking Sector

India moves to allow more businesses to offer basic financial services.  Full Article 

Forever21 in India

Forever21 in India

Forever21 sets sights on Indian cities, but please hold the hot pants  Full Article 

Japan Economy

Japan Economy

Japan inflation slows in October, output and spending show signs of recovery  Full Article 

Reuters India Mobile

Reuters India Mobile

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