FP:Rupee falls to more than 6 month low on oil shares
Mumbai: The rupee slid to a more than 6-month low on Thursday, dragged by strong dollar demand from oil importers and weak local shares, with losses in Asian currencies also weighing high.
At 11:13 a.m, the partially convertible rupee was at 45.6150/6300 per dollar, after touching 45.66 – a level last seen on February 11 – and 0.5 percent weaker from Wednesday’s close of 45.4050/4150.
Traders said the rupee is unlikely to weaken beyond 45.70 as exporters are seen selling dollars around that level.
“Oil (price) is weakening and there is huge demand for dollar from the oil refiners. That is the major factor for the rupee falling today,” a trader with a state-run bank said.
Oil is India’s biggest import item and oil refiners are the largest buyers of dollars in the local market.
New Delhi is estimated to owe around $4 billion to Tehran for its oil imports and local oil firms have been aggressively buying dollars to make these payments.
Brent crude fell, staying below $111 a barrel on Thursday as concerns over Europe’s debt crisis and a firmer dollar drew investors away from riskier assets like oil and into the safe havens of gold and the Swiss franc.
The BSE Sensex was down more than 1 percent. Most Asian currencies were also weaker against the dollar.
The euro was at $1.4402, compared with $1.4482 at end of local forex trade on Wednesday, while the index of the dollar against six major currencies was at 73.906 points, compared with 73.620 points previously.
The Swiss franc edged higher versus the euro on Thursday, and may test a record high in coming days after the Swiss National Bank’s latest steps to curb franc strength fell short of expectations. “Because of the global worries, there is not much appetite for risk,” a dealer with another state-run bank said.
The one-month onshore forward premium was at 6 points from 5.50 points at previous close.
The three-month was at 30 points from 31.75 points and the one-year onshore forward premium was at 138.25 points from 143.25.
One-month offshore non-deliverable forward contracts were quoted at 45.74, weaker than the onshore spot rate.
In the currency futures market , the most traded near-month dollar-rupee contracts on the National Stock Exchange were at 45.6350, while on the MCX-SX and the United Stock Exchange they were both at 45.6325. The total volume was at $3.67 billion.
