Comments
The rupee crossed levels of 49 during day trade on Thursday and touched 49.11, as the Sensex fell further by 530 points.
According to forex dealers risk aversion is driving investors to the US dollar, which has been appreciating against other global currencies.
There are expectations in the domestic market that the Reserve Bank of India may intervene and sell dollars to stem further fall in the rupee, though so far there are no signs of any action by the central bank.
The rupee had opened almost 50 paise lower at 48.82. On Wednesday, the rupee had closed at 48.33.
“For today the equity market is the bigger culprit, as the euro’s weakness has already been factored in. If the central bank intervenes it may hold at these levels. If not it could cross 49 as there is bound to be month-end dollar demand from oil companies,’’ said a forex dealer with a private bank.
According to the head of treasury of a public sector bank the euro is becoming more and more uncertain due to the problems in the eurozone like the Greece crisis and the downgrade of Italy.
“The latest move by the US Fed to buy long term securities is comforting the market with regard to illiquidity of the dollar. So in relation to the dollar other currencies are depreciating. There is no other domestic reason for the rupee to weaken,’’ he said.
Comments
COMMENT NOW
Comments
Comments have to be in English, and in full sentences. They cannot be abusive or personal. Please abide by our community guidelines for posting your comments.
We have migrated to a new commenting platform. If you are already a registered user of TheHindu Businessline and logged in, you may continue to engage with our articles. If you do not have an account please register and login to post comments. Users can access their older comments by logging into their accounts on Vuukle.