Rupee at near five-month low on dollar demand

Mumbai, Aug 6: The Indian rupee Wednesday fell to its lowest level since mid-March against the US dollar due to large-scale buying of the greenback by foreign banks and signs of foreign institutional investors booking profits on Indian bourses.

The rupee fell some 40 paise to 61.42 per dollar, even as a key Indian equities index ended nearly 1 percent lower, while gold rose nearly Rs.110 to Rs.28,500 per 10 grams, ahead of the spurt in demand seen during the festive season.

With foreign institutional investors turning net sellers in Indian equities and debt markets, banks were buying dollars on their behalf for repatriation, which further weakened the Indian currency.

Analysts said that huge outflow of foreign money in equities markets and sale of American currency by banks and exporters weakened the Indian currency position.

"Today's movement is impacted by international economic and geo-political situation," Anindya Banerjee, currency analyst, Kotak Securities, told IANS.

"Going forward US fed decision on interest rates and stimulus easing have to seen to know the impact it have on the emerging markets, especially India."

Data with the National Securities Depository Limited (NSDL) showed that foreign funds were net sellers Tuesday in the markets to the tune of $112.91 million, or Rs.688.97 crore.

During August, foreign funds have pulled out nearly $1 billion.

Some of the major currencies in Asia were also down, notably the South Korean won, the Malaysian ringgit, Indonesian rupiah and the Philippine peso. The Japanese yen and the Thai baht, however, were marginally up.

IANS