Financial Daily from THE HINDU group of publications
Saturday, Dec 03, 2005
Financial Daily from THE HINDU group of publications Saturday, Dec 03, 2005 |
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Economy Money & Banking - Forex Rupee at new 14-month low Our Bureau
Mumbai , Dec. 2 THE rupee dived to a fresh 14-month low against the dollar on Friday, in tandem with a fall in other major currencies. In the domestic market, heavy importer buying pulled the rupee down against the greenback. The rupee opened at 46.11, lower than Thursday's close of 46.00/01. It then moved to 46.15, after which there were rumours of intervention by the central bank that lifted the rupee to 46.10/11. However, the gains were quickly lost as heavy dollar demand drove the domestic currency to touch an intra-day low of 46.24. It finally closed the day at 46.18. Mr R.V.S. Sridhar, Vice-President, Treasury, UTI Bank, said the rupee's fall on Friday was in conjunction with the global trend of the dollar gaining against all major currencies. Mr L.V. Prasad, Head, Corporate Sales, IndusInd Bank, said that internationally the favourable interest rate differential in the US, in comparison to the European Union, is prompting investors to park their funds there. "Domestically, the rupee touching a fresh low means that importers are heavily buying to cover their positions in the short term. "Exporters on the other hand are cutting their positions in anticipation of a further weakening of the rupee," said Mr Prasad.
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