The Hindu Business Line : Rupee decline continues

The rupee continued its downtrend against the dollar on Thursday, tracking global currencies which weakened against the dollar. Dollar-buying by foreign banks to gain arbitrage in the non deliverable forward (NDF) market also weakened the rupee, said dealers. The rupee opened lower at 45.30/32 and fell to a two-year low of 45.57. It strengthened slightly to 45.41/42, as public sector bank sold dollars. The rupee finally ended trade at 45.56/57, against the previous close of 45.10/11. According to a forex dealer with a private bank, public sector banks sold dollars at various levels like 45.42/44 and then at 45.55. "Public sector banks were seen holding the rupee at various levels. On Wednesday, PSBs sold $3 billion worth dollars and today they sold about $2.5 billion. The Reserve Bank of India is intervening, but not allowing the rupee to appreciate drastically," he said. Given this trend, the rupee could weaken further, he added. Foreign banks are buying dollars in the spot market and selling in the NDF market, as it offers an arbitrage of about 15 paise, said a dealer with a public sector market. The rupee is now immune to the stock market and oil prices, and is mainly tracking the global currencies. The dollar touched a one year high against the euro. In the forward premia market the six-month closed at 2.94 per cent (3.32 per cent) and the 12-month at 2.55 per cent (2.77 per cent). - Our Bureau

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