Rupee depreciates 7 paise to 66.63 against US dollar
The domestic currency had closed 11 paise higher at 66.56 in the previous session amid fag-end dollar selling by banks and exporters.
By ET Online | Updated:
NEW DELHI: The rupee fell 7 paise to 66.63 against the US dollar in early trade on Thursday despite a strong show by most Asian currencies after the US dollar index June future on ICE overnight recorded its first decline in seven sessions.
The domestic currency had closed 11 paise higher at 66.56 in the previous session amid fag-end dollar selling by banks and exporters. The gains on Wednesday were made amid expectations that the Mauritius treaty may impact foreign flows, but not significantly.
“With the capital gains exemption no more available in the Treaty with Mauritius, the overseas investors who have so far been investing in Indian stock markets through FIIs under Participatory Notes route which come through Mauritius (about 40 per cent), will be impacted in respect of future investments in India (i.e. from 1 April 2017). Nonetheless, due to the grandfathering clause, the FIIs can continue to take the treaty benefits in respect of investments made before April 1, 2017,” said Suresh Surana, Founder, RSM Astute Consulting Group.
Provisional data available with BSE showed while FIIs pulled out Rs 362 crore worth of equities on Wednesday, DIIs were net buyers to the tune of Rs 729 crore for the day.
On Thursday, the ICE dollar index June futures, which tracks the movement of dollar against six major world currencies, fell 0.45 per cent to 93.84.
Most Asian currencies such as the Malaysian ringgit (up 0.35 per cent), the Korean won (up 0.29 per cent), the Thai baht (up 0.12 per cent) and the Philippine peso (up 0.11 per cent) were trading higher against the greenback. The rupee with a 0.61 per cent fall against the US dollar has been the worst-performing major Asian currency year-to-date. The Japanese yen with a 10.95 per cent rise, has been the top performer.
The domestic currency had closed 11 paise higher at 66.56 in the previous session amid fag-end dollar selling by banks and exporters. The gains on Wednesday were made amid expectations that the Mauritius treaty may impact foreign flows, but not significantly.
“With the capital gains exemption no more available in the Treaty with Mauritius, the overseas investors who have so far been investing in Indian stock markets through FIIs under Participatory Notes route which come through Mauritius (about 40 per cent), will be impacted in respect of future investments in India (i.e. from 1 April 2017). Nonetheless, due to the grandfathering clause, the FIIs can continue to take the treaty benefits in respect of investments made before April 1, 2017,” said Suresh Surana, Founder, RSM Astute Consulting Group.
Provisional data available with BSE showed while FIIs pulled out Rs 362 crore worth of equities on Wednesday, DIIs were net buyers to the tune of Rs 729 crore for the day.
On Thursday, the ICE dollar index June futures, which tracks the movement of dollar against six major world currencies, fell 0.45 per cent to 93.84.
Most Asian currencies such as the Malaysian ringgit (up 0.35 per cent), the Korean won (up 0.29 per cent), the Thai baht (up 0.12 per cent) and the Philippine peso (up 0.11 per cent) were trading higher against the greenback. The rupee with a 0.61 per cent fall against the US dollar has been the worst-performing major Asian currency year-to-date. The Japanese yen with a 10.95 per cent rise, has been the top performer.
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