Forex

Rupee plunges to 54.76 on weak euro, oil demand

Our Bureau Mumbai | Updated on November 17, 2017 Published on November 09, 2012

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The rupee reversed its early gains and ended lower at 54.76 against the dollar as euro weakened and oil importers rushed to buy dollars to meet payments ahead of the festival holiday.

The forex markets will remain shut on November 13 and 14 for Diwali.

“Some aggressive oil-related dollar buying and a weak euro contributed to the rupee’s fall,” a chief dealer with a public sector bank said.

The currency has depreciated by 1.7 per cent this week, which was marked by the eventful US Presidential election and the Greek vote on austerity measures.

The local unit had opened stronger at 54.30 from its Thursday’s close of 54.36.

Experts feel that the rupee might trade in the 52.50 to 53.50 band for the next few months.

Bank of America Merrill Lynch said in a report that the rupee is likely to touch 51 against the dollar by December-end.

According to the report, higher forex reserves are key for the recovery of rupee and it is not likely to “sustainably strengthen” beyond Rs 50 a dollar without the intervention of the Reserve Bank of India.

The RBI has repeatedly said that it will intervene in the forex market only to smooth volatility.

Call, bond rates drop

The interbank call rates, or the rate at which banks borrow from each other to meet their short-term requirements, closed lower at 8.05 per cent. It had closed at 8.10 per cent on Thursday.

The 8.15 per cent government security, which matures in 2022, ended lower at Rs 99.56 (yield: 8.21 per cent) from Thursday’s close of Rs 99.76 (yield: 8.18 per cent).

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Published on November 09, 2012
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