The rupee closed at its lowest level against the dollar in nearly 17 months on Monday as importers rushed for dollar purchases. Despite RBI intervention, the rupee closed at 44.17/18 per dollar on Monday, its lowest close since mid-March 2007 and 0.5 per cent lower than Friday's close of 43.93/94.
"Importers have been buying heavily today and only central bank intervention has checked the fall," said a dealer who expects the rupee to fall to 44.50 in the near term. Dealers at other banks said the central bank sold around $800 million in the spot market to lift the rupee off its low, and also sold dollars in the forward market.
Forex dealers said a sharp recovery in dollar against other currencies in global market also weighed on the rupee value. Dollar supply is inadequate as there has been sustained demand here for the US currency amidst gains in the overseas market, they added.
Meanwhile, higher monthly trade deficit added to the weak rupee sentiment The trade deficit in July was $10.8 billion, widening from $9.8 billion in June. For April-July, the first four months of the fiscal year, the deficit widened to $41.23 billion between April-July from $27.35 billion a year earlier.
The rupee has fallen 10.8 per cent so far in 2008 to be one of the weakest Asian currencies against the dollar. It rose more than 12 percent in 2007. Dealers said investors have increased their short bets on the South Korean won, Malaysian ringgit and Indian rupee, selling those currencies against the dollar in expectation they will weaken further.
Courtesy : www.indianexpress.com
"Importers have been buying heavily today and only central bank intervention has checked the fall," said a dealer who expects the rupee to fall to 44.50 in the near term. Dealers at other banks said the central bank sold around $800 million in the spot market to lift the rupee off its low, and also sold dollars in the forward market.
Forex dealers said a sharp recovery in dollar against other currencies in global market also weighed on the rupee value. Dollar supply is inadequate as there has been sustained demand here for the US currency amidst gains in the overseas market, they added.
Meanwhile, higher monthly trade deficit added to the weak rupee sentiment The trade deficit in July was $10.8 billion, widening from $9.8 billion in June. For April-July, the first four months of the fiscal year, the deficit widened to $41.23 billion between April-July from $27.35 billion a year earlier.
The rupee has fallen 10.8 per cent so far in 2008 to be one of the weakest Asian currencies against the dollar. It rose more than 12 percent in 2007. Dealers said investors have increased their short bets on the South Korean won, Malaysian ringgit and Indian rupee, selling those currencies against the dollar in expectation they will weaken further.
Courtesy : www.indianexpress.com