Business Daily from THE HINDU group of publications
Friday, Aug 17, 2007
ePaper
Business Daily from THE HINDU group of publications Friday, Aug 17, 2007 ePaper |
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Money & Banking
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Forex Rupee falls on global worries, equity sell-off
Our Bureau Mumbai, Aug. 16 The rupee was extremely volatile on Thursday and closed about 60 paise lower at 41.36/37 against Tuesday’s close of 40.7450/7550, following a sell-off in the domestic stock market. The rupee had opened at around 41 levels on Thursday. It had touched levels of 41.20 in June this year Following the sub-prime crisis in the US and sharp fall in other Asian markets, foreign investors are pulling out of assets such as the Indian rupee, said dealers. According to Mr V Rajagopal, Chief Dealer-Forex, Kotak Mahindra Bank, the rupee moved in tune with global markets. “The rupee is a high yielding asset, which is why foreign investors are pulling out of it. All negative factors such as the fall in the Asian stock markets and the high oil price clubbed together pulled the rupee down,” he explained. Though some public sector banks were seen selling dollars, it was unlikely that it was on behalf of the Reserve Bank of India, dealers said. Among global currencies, the pound and euro lost ground against the dollar, while the yen gained, as ‘risk averse’ investors flocked towards it. Mr L.V. Prasad, Assistant Vice-President, Head Corporate Sales, IndusInd Bank, said the rupee could fall further if the equity market continued to be bearish. Mr Rajagopal also agreed that the rupee may touch levels of 41.50. In the forward premia market, the six-month premium closed at 1.81 per cent (1.96 per cent) and the 12-month at 1.87 per cent (1.95 per cent).
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