Rupee at 17-month low; bonds rise
The rupee slumped to a 17-month low, as the dollar rose against most currencies globally.
By ET Bureau |
The rupee slumped to a 17-month low, as the dollar rose against most currencies globally. The local market saw thin volumes, as most traders were away due to an extended weekend and an international conference for forex traders in Macau.
The rupee fell to a low of 43.70 against the greenback, as the dollar strengthened against other international currencies as well, reports Our Bureau in Mumbai.
The rupee ended the day at 43.59/60 against the dollar, after having fallen to 43.64 levels during the day. The local currency weakened considerably from its previous close of 43.01/02 on Thursday. The markets were closed on Friday for the Independence Day, and will be closed on Tuesday too on account of the Parsi new year. The rupee has lost over 140 paise in the past one week.
���The rupee was under pressure since morning, as the dollar was strengthening in overseas markets. With a thin market and sustained demand from oil companies and foreign banks, the rupee was bound to fall,��� said a trader from a private bank. The central bank also preferred to stay away from the market, though market participants expect it to intervene if the rupee continues to fall like this.
While oil refiners bought dollars to provide for their crude purchases, foreign banks bought dollars to arbitrage the rate differential in the overseas non-deliverable forwards (NDF) market. Foreign banks often buy dollars in the spot market, and simultaneously, sell them on the NDF market when the rates there are weaker. One-month offshore non-deliverable forward contracts were quoted around the 43.81/86 per dollar mark, weaker than the spot rate.
Meanwhile, bond prices rose on Monday, snapping a three-day fall. The market sentiment improved considerably, following a dip in oil prices and hopes of a moderation of inflation. Yield on the 10-year benchmark bond, the 8.25% bond maturing in 2018, ended the day at 9.08%, slipping from Thursday���s close of 9.14%. Traded volumes, however, remained thin at just about Rs 3,000 crore.
The rupee fell to a low of 43.70 against the greenback, as the dollar strengthened against other international currencies as well, reports Our Bureau in Mumbai.
The rupee ended the day at 43.59/60 against the dollar, after having fallen to 43.64 levels during the day. The local currency weakened considerably from its previous close of 43.01/02 on Thursday. The markets were closed on Friday for the Independence Day, and will be closed on Tuesday too on account of the Parsi new year. The rupee has lost over 140 paise in the past one week.
���The rupee was under pressure since morning, as the dollar was strengthening in overseas markets. With a thin market and sustained demand from oil companies and foreign banks, the rupee was bound to fall,��� said a trader from a private bank. The central bank also preferred to stay away from the market, though market participants expect it to intervene if the rupee continues to fall like this.
While oil refiners bought dollars to provide for their crude purchases, foreign banks bought dollars to arbitrage the rate differential in the overseas non-deliverable forwards (NDF) market. Foreign banks often buy dollars in the spot market, and simultaneously, sell them on the NDF market when the rates there are weaker. One-month offshore non-deliverable forward contracts were quoted around the 43.81/86 per dollar mark, weaker than the spot rate.
Meanwhile, bond prices rose on Monday, snapping a three-day fall. The market sentiment improved considerably, following a dip in oil prices and hopes of a moderation of inflation. Yield on the 10-year benchmark bond, the 8.25% bond maturing in 2018, ended the day at 9.08%, slipping from Thursday���s close of 9.14%. Traded volumes, however, remained thin at just about Rs 3,000 crore.
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