Indian rupee breaks its two-week gaining streak against US dollar

Oct 19 2013, 20:50 IST
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In last two week, Indian rupee had flared up by 144 paise or 2.31 per cent (Reuters) In last two week, Indian rupee had flared up by 144 paise or 2.31 per cent (Reuters)
SummaryIndian rupee depreciated by 20 paise against the US dollar to settle at 61.27.

Nothwithstanding that the Indian rupee logged its two-month intra-trade high of 60.92, it broke its two-week gaining string and depreciated by 20 paise against the American currency to settle at 61.27, following fresh US dollar demand from importers and some banks, despite firm local stocks and sustained capital inflows.

At the Interbank Foreign Exchange (Forex) market, the local unit resumed slightly lower at 61.15 a US dollar from last weekend's close of 61.07 and moved in a wide range of 60.92 and 61.94 before settling the week at 61.27, exhibiting a fall of 20 paise or 0.33 per cent.

In last two week, it had flared up by 144 paise or 2.31 per cent.

The BSE benchmark Sensex closed the week higher by over 354 points, or 1.73 per cent, while FIIs injected USD 442.38 crore last week on first three trading days.

Weak inflation and industrial output data also weighed on the rupee, a forex dealer said.

The government said wholesale price inflation was at a seven-month high of 6.46 per cent in September, compared with 6.1 per cent in August.

The index of industrial production grew 0.6 per cent in August compared with 2.8 per cent in July, the government said.

The Indian rupee shifted between gains and losses after a news report that the Reserve Bank of India is considering closing the forex swap window for oil companies, which the RBI later clarified was still open, Goenka said.

The RBI said in a release that the oil marketing companies swap window remains operational and that any tapering of the facility will be done in a calibrated manner.

Pramit Brahmbhatt, CEO, Alpari Financial Services (India) said, "Indian rupee traded weak but eventually recovered and closed slightly lower with help of local equities which closed positively for the third consecutive week.

"US dollar came under pressure this week, along with European shares, as US budget deal gave way to worries over the economic impact of the government shutdown and prospects of a re-run early next year. Also, Chinese credit agency Dagong downgraded the US. The trading range for the USD/INR pair for the week is expected to be within 60.00 to 63.00."

The Indian rupee premium for the forward dollar ended mixed on alternate bouts of buying and selling.

The benchmark six-month forward dollar premium payable in March finished slightly lower at 224-228 paise from last weekend's close of 225-1/2-229-1/2

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