Business Daily from THE HINDU group of publications
Wednesday, Jul 02, 2008
ePaper | Mobile/PDA Version | Audio
Business Daily from THE HINDU group of publications Wednesday, Jul 02, 2008 ePaper | Mobile/PDA Version | Audio |
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Forex Industry & Economy - Economy Markets - Foreign Institutional Investors Our Bureau
Mumbai, July 1 The rupee continued its downward trend and closed 30 paise lower against the dollar, due to fears of high oil price and pullout by FIIs from the domestic stock market. The Sensex lost 500 points today and global oil prices continued to reign over $140 a barrel. On Tuesday, the rupee opened at 43.10 and fell to the day’s low of 43.47. This was followed by some dollar selling, which helped the rupee to gain some losses. It closed at 43.47, against the earlier close of 43.03/04. The chief forex dealer of a public sector bank said that the rupee will continue to remain under pressure as long as there are custodial outflows from the equity market. “The RBI is not selling dollars as aggressively, to support the rupee because if it continued to do so, the foreign exchange reserves will get depleted,” the dealer said. Today’s fall was also guided by the strong arbitrage between the dollar value in the Indian market and the overseas NDF (non-deliverable forward) market, said the head of treasury with a private bank. “The differential is about 30 paise,” he said. The forwards went up sharply, in anticipation of tight liquidity when the new CRR (cash reserve ratio) kicks in from 5 July. The six-month forward premium closed at 5.47 per cent (4.93 per cent) and the 12-month closed at 4.57 per cent (4.16 per cent). Rupee breaches 43-level Rupee definitely trended south Is crude price logic not just crude logic? More Stories on : Forex | Economy | Foreign Institutional Investors
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