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Indian rupee at 3-week low against dollar
Last Updated: 2009-10-28 11:08:10
The rupee weakened to new three-week lows on Wednesday as a lower opening in the stock market raised worries of foreigners repatriating funds while weaker Asian units added to the woes.
At 10:10 a.m. (0440 GMT) the partially convertible rupee was at 47.16/17, its weakest since Oct. 6 and 0.6 percent weaker than its previous close of 46.88/90.
"The rupee has depreciated tracking the dollar index and global equity markets, even Asian units are weaker," the chief dealer with a large private sector bank said.
"In the medium term, may be over the next quarter, we will see the rupee under pressure, even equity markets seem due for a correction, so we could test levels like 47.80 or even 48, but in the last quarter of this year, we should be back in the 45-46 range," he said.
The MSCI index of Asian stocks ex-Japan was down 2 percent.
Local shares dropped 0.8 percent early, mirroring the losses in global markets, which dropped as weaker-than-expected U.S. consumer confidence data deepened concerns over the strength of economic recovery.
Foreign fund investments in local shares have reached a net $14.1 billion so far in 2009 and have been a key factor fuelling the rise in both the equity market and the rupee. Last year, foreigners had pulled out a net over $13 billion.
Most Asian currencies were lower compared to the dollar. Gains in the dollar versus major units was also expected to hurt the rupee.
The dollar held gains against a basket of currencies on Wednesday while the yen rose as investors trimmed stretched pro-risk positions in higher yielding currencies as stocks fell on weaker-than-expected U.S. data.
One-month offshore non-deliverable forward contracts were quoting at 47.24/34, weaker than the onshore spot rate.
(Reporting by Swati Bhat; Editing by Jarshad Kakkrakandy)
(For more news on Reuters Money visit http://www.reutersmoney.in)
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