After seeing stable movement for a day, the rupee depreciated on Friday tracking the weak domestic equity markets and euro.

The rupee opened lower at 52.22 and touched a low of 52.45. It closed at 52.22 about 17 paise lower from previous close of 52.06/07.

There was continuous dollar buying after seeing that the euro had fallen to a two-month low against the dollar, said dealers.

The head of treasury of a public sector bank said, “There is no relief for the rupee. It may have seemed as though the currency was stabilising in the last one or two sessions. But it is not so. It will move further down.''

The outlook on the Indian economy is weak internationally due to concerns like the growing fiscal deficit and no sign of revenues either from taxes or from divestment. Among the emerging market economies India is the worst, which is why foreign investors are pulling out, he said.

In the overseas market, the US dollar was strong against currencies like the euro and the pound. The lack of a firm plan to tackle the Euro zone crisis is seen as a negative for the currency and is driving investors to safe heaven currencies like the dollar.

The yen also fell against the dollar after rating agency Standard and Poor's statement that they may downgrade Japan's credit rating, said a dealer with a private sector bank

“As long as currencies like euro and pound are weak against the dollar, the rupee too will remain weak,'' the dealer said.

In the forward premia market the 12-month premium closed at 2.9 per cent, lower than the previous close of 3.10 per cent as dealers sold dollars in the forward market after seeing its weakness in the spot market.

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