The Hindu Business Line : Rupee falls by 73 paise to touch 47.81

Heading south
The 700-point fall in the Sensex put pressure on the already weak rupee
Demand for dollars was especially high from oil companies
Exporters greet depreciating rupee, importers worried

Our Bureau

Mumbai, Oct. 6 The Indian rupee continued its free fall against the dollar, depreciating by around 73 paise on Monday.

Currency dealers said the crash in the domestic equity market and sustained demand for the greenback pulled down the rupee. The domestic currency opened weaker at 47.38/40 and plunged into an intra day low of 47.86. It recovered marginally to close at 47.81/82, against the previous close of 47.08/10.

The 700-point fall in the Sensex put pressure on the already weak rupee, said a dealer with a private bank. According to stock exchange figures, FIIs were net sellers of equities worth Rs 1,169.33 crore on Monday.

There was sustained dollar demand from all quarters. Demand was especially high from oil companies as crude prices fell to $90 a barrel, added the dealer. In the global markets, the dollar strengthened against other major currencies.

Even though the public sector banks sold dollars at 47.45 levels at the behest of RBI, it did not contain the rupee’s fall, said dealers. In the forward market, while the six-month premium turned negative to 0.49 per cent (0.44), the 12-month premium fell to 0.01 per cent (0.57).

While exporters greeted the depreciating rupee, importers said that their margins would be hit.

“Pulses importers have been hit due to rupee’s depreciation. As it is, we were reeling under the pressure of high prices in the international markets”, said Mr K.C. Bhartia, President, Pulses Importers Association of India.

From an industry perspective, the rupee depreciation is good news, said Mr Rishi Maheshwari, an IT analyst with Centrum Broking. Most IT companies will register a surge in rupee earnings, because of the rupee depreciation. However, on the other income front they could register losses, depending on the proportion of their hedged revenues.

Mr Ganesh Kumar Gupta, President, Federation of Indian Exports Organisation, said several large exporters went on to hedge their exposure, as they did not expect rupee to depreciate to this extent.

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