| Date: |
09-10-2010 |
| Subject: |
Rupee Falls most in a Month on Intervention Risk, Imports |
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The rupee fell the most in a month on concern importers will step up dollar purchases and RBI may intervene following a rally that’s made the currency Asia’s best performer of the past month.
The rupee completed a sixth weekly gain and on Thursday climbed to a two-year high as funds pumped a record $21 billion into Indian stocks this year. Central bank deputy governor Subir Gokarn said this week policy makers are monitoring capital flows and will “respond” if the exchange rate is affected. A stronger rupee erodes the value of Indian exporters’ overseas income.
The currency weakened on “the risk of Reserve Bank of India intervention and importers covering their near-term” dollar payments, J Moses Harding, a Mumbai-based executive vice-president at IndusInd Bank , wrote in a research note on Friday.
The rupee declined 0.5% on Friday to 44.4350 per dollar at the close of trade in Mumbai, paring its advance this week to 0.3%, according to data compiled by Bloomberg. It has surged 5% in the past month, the best performance among the 10 most-traded Asian currencies, and touched 44.115 on Thursday, the strongest level since September 2008.
Offshore forwards indicate the rupee will trade at 44.97 to the dollar in three months, compared with expectations of 44.75 on Thursday and 45.09 at the end of last week.
Source : economictimes.indiatimes.com
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