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Rediff.com  » Business » Rupee drops by 13 paise to 52.81

Rupee drops by 13 paise to 52.81

Last updated on: October 12, 2012 18:28 IST

RupeeTracking weak stock market, the rupee today surrendered initial gains and settled lower by 13 paise at 52.81 on heavy dollar demand from importers.

The rupee commenced slightly better at 52.65 a dollar from previous close of 52.68 at the Interbank Foreign Exchange (Forex) market.

Soon after, it rallied to a high of 52.55 on sustained dollar selling by exporters and overnight fall in dollar in New York due to sharp drop in jobless claims last week and downgrade of Spain's sovereign rating.

However, coupled with a steep fall in stock market benchmark, Sensex and renewed dollar demand from importers put the rupee under pressure quickly.

The rupee fell back to a low of 52.90, before settling slightly better at 52.81, a fall of 13 paise or 0.24 per cent over Thursday.

Dealers said FII inflows of Rs 201 crore in stocks on Friday cushioned the local currency against a sharper fall.

"The rupee was seen in a narrow range of 35 paisa for the day.

The positive IIP data failed to impact the rupee.

"The negative stock market added to the loss in rupee...we target rupee towards 53 levels again in coming days." said Abhishek Goenka, Founder & CEO, India Forex Advisors.

A bad earnings starts by Infosys and grim global economic outlook dominated by risk aversion trades weakened the rupee, said Pramit Brahmbhatt, CEO, Alpari Financial Services India.

The premium for the forward dollar recovered slightly on fresh payments from banks and corporates.

The benchmark six-month forward dollar premium payable in March settled better at 149-1/2-151-1/2 paise from Thursday's close of 147-1/2-149-1/2 paise.

Meanwhile, showing signs of turnaround, the Index of Industrial Production grew by 2.7 per cent in August, reversing the trend of contraction witnessed during the previous two months. Retail inflation also eased to 9.73 per cent in September, from 10.03 per cent in August.

However, forex market participants appeared to ignore these key economic data.

The premium for far-forward contracts maturing in September ended higher at 293-295 paise from 288-1/2-290-1/2 paise.

The RBI has fixed the reference rate for the US dollar at 52.7000 and for euro at 68.1585.

The rupee also fell back against the pound sterling to 84.89 from Thursday's close of 84.48 and turned negative to end at 68.53 per euro from 68.08.

It moved down against the Japanese yen to 67.35 per 100 yen from previous close of 67.21.

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