Rupee slips by nearly 42 paise during week

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Mumbai, Aug 23: The spot rupee plummeted by around 42 paise and closed negative at 43.42/43 against per US dollar for the consecutive second week ended yesterday compared to 43.00 of the previous week level, as foreign direct investment (FDI) inflows and sales by exporters helped the rupee.

Crude oil at USD 120/bbl weighs on rupee. Though equity markets ended with gains, outlook remains weak.

The trading was recorded four days during the week, except Tuesday, when it was officially closed for the Parsi New Year.

During the week, rupee fluctuated in a wide range between 43.66 and 43.86, which ended low at 43.42 yesterday.

On Monday, trading resumed lower at 43.26 from it previous day's finish. Later Rupee was also hit by a weak stock market. The Rupee today ended at a 17-month-low at 43.59/60 against the US dollar with a big loss of nearly 60 paise on heavy dollar demand by Foreign banks and oil sectors.

Dealers said the Indian unit is on the verge of a recovery against the dollar, as nationalized banks have started selling dollar to help its cause.

''There was no major impact on daily volumes despite Wednesday's token day nationwide-strike by Indian and foreign banks,'' they pointed out.

Banks sold dollars between 43.85 and 43.75 in what dealers suspected was intervention on behalf of the central bank.

Earlier, the partially convertible rupee fell to 43.87 per dollar in early trade, its lowest since March 20, 2007. It fluctuated in a wide range between 43.66 and 43.86 per dollar during the session, 0.3 percent weaker than Monday's close of 43.59/60.

Tuesday was a central bank holiday.

On mid-week, the rupee fell by 9.9 percent against the dollar since the start of the year, which can be attributed to foreign investors pulling funds out of the stock market. The prospect of state bank action meant the rupee was unlikely to weaken back past 43.80 this session, and further gains in the stock market could help it towards 43.60 per dollar.

Traders received reports from abroad that the US dollar traded in the mid 108-yen levels in early Tokyo deals, down from upper 108-yen levels late Thursday. The US dollar recently bought 108.57 yen, compared to 108.68 yen earlier in the day.

Another news from New York that Crude oil prices fell more than 5.4 per cent on Friday in the biggest one-day slide since 2004 led the dealers to turn their focus to rising supply levels and weakening global demand, which affected a downward journey for Indian currency against US dollar, traders added.


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