Rupee slips to record low of 50.15 per dollar
24 Oct, 2008
MUMBAI: Rupee opened on Friday at a record low of 50.15 per dollar, weighed down by heavy falls in Asian stocks, but soon retraced some losses aided by heavy RBI intervention, traders said.
At 9:40 am, the partially convertible rupee was at 49.94/95 per dollar, 0.3 per cent weaker than a close of 49.81/82 on Thursday. At the record low of 50.15, the rupee had lost 21.4 per cent so far in 2008.
Four dealers said the central bank likely sold dollars via state-run banks to help the rupee recover from the record low.
"The rupee opened at 50.15, after which some selling came in, helping it recover," said KN Reghunathan, chief dealer with state-run Union Bank of India.
"All Asian markets are down, so repercussions will be there in India also, so there is expectations FIIs will sell in India as well. There is also some month-end importer demand in the market," he added.
Indian shares are expected to extend losses to a third consecutive session on Friday after another sharp sell-off in Asian markets, with investors looking to the central bank's policy review for some comfort.
Foreigner institutional investors (FIIs) have so far sold a net $12.2 billion worth of Indian stocks, after buying a record $17.4 billion last year.
Asian stocks slumped on Friday as the global economic slowdown and emerging market instability hurt an array of corporate outlooks. S
Dealers said importers and oil refiners were buying dollars to meet month-end import commitments. Oil is India's biggest import, and refiners are the largest buyers of dollars in the domestic currency market.
One-month offshore non-deliverable forward contracts were quoting at 52.15/30, 4.2 percent weaker than the onshore spot rate, indicating a bearish outlook for the rupee in the near-term, and providing arbitrage opportunity to banks.
Banks buy dollars in the local market and sell them offshore to benefit from the large price differential.
Source : Economic Times
24 Oct, 2008
MUMBAI: Rupee opened on Friday at a record low of 50.15 per dollar, weighed down by heavy falls in Asian stocks, but soon retraced some losses aided by heavy RBI intervention, traders said.
At 9:40 am, the partially convertible rupee was at 49.94/95 per dollar, 0.3 per cent weaker than a close of 49.81/82 on Thursday. At the record low of 50.15, the rupee had lost 21.4 per cent so far in 2008.
Four dealers said the central bank likely sold dollars via state-run banks to help the rupee recover from the record low.
"The rupee opened at 50.15, after which some selling came in, helping it recover," said KN Reghunathan, chief dealer with state-run Union Bank of India.
"All Asian markets are down, so repercussions will be there in India also, so there is expectations FIIs will sell in India as well. There is also some month-end importer demand in the market," he added.
Indian shares are expected to extend losses to a third consecutive session on Friday after another sharp sell-off in Asian markets, with investors looking to the central bank's policy review for some comfort.
Foreigner institutional investors (FIIs) have so far sold a net $12.2 billion worth of Indian stocks, after buying a record $17.4 billion last year.
Asian stocks slumped on Friday as the global economic slowdown and emerging market instability hurt an array of corporate outlooks. S
Dealers said importers and oil refiners were buying dollars to meet month-end import commitments. Oil is India's biggest import, and refiners are the largest buyers of dollars in the domestic currency market.
One-month offshore non-deliverable forward contracts were quoting at 52.15/30, 4.2 percent weaker than the onshore spot rate, indicating a bearish outlook for the rupee in the near-term, and providing arbitrage opportunity to banks.
Banks buy dollars in the local market and sell them offshore to benefit from the large price differential.
Source : Economic Times