The Hindu Business Line : Rupee weakens further

The rupee inched close to the 43 mark against the dollar on Thursday, led by a falling equity index and dollar buying by foreign banks. However, regular dollar selling by nationalised banks helped prevent a sharp fall in the rupee, said forex dealers. The domestic currency opened at 42.93 and closed at 42.96, against the previous close of 42.89.

“The pressure building in the market is such that the 43 level may be breached very soon. In today’s trade, we saw that at every three to four paise movement, nationalised banks would come in and let the rupee hover around that level for some time, rather than let it depreciate sharply,” said the chief forex dealer with a private bank. Expectation of a rate hike by the US Fed is also working against the rupee. But the market has already factored a higher domestic inflation, the figures for which would be released on Friday, the dealer added.

The forward premia went up, driven more by sentiment, the dealer said. The six month closed at 3.28 per cent (2.82 per cent) and the 12-month at 2.99 per cent (2.53 per cent). –

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