Rupee falls to 51.81 against dollar
The rupee seems to have temporarily halted its southward march, and was trading at 51.81 against the dollar.
By ET Bureau |
MUMBAI: The rupee seems to have temporarily halted its southward march, and was trading at 51.81 against the dollar. Dealers said with the stock market holding on and dollar selling by banks continuing is giving support to the local unit. However they add that its only a matter of time before its starts losing value again.
The rupee has fallen 2% so far this week, close to 5% in the past few sessions and 6.7% in 2009. Barclays expects the rupee to weaken to 56 by June. The currency weakened earlier in the day for an eighth day to 52.04, the longest losing streak since October, the last time it fell from 47 to near 50 levels. The rupee had touched an all time low of 52.18 against the dollar on Tuesday.
"Some foreign banks were seen selling dollars, but the activity is really not much," says a dealer at DCB. "There is not much RBI intervention and the stock market holding on is stemming the bearish sentiment," he added. BSE sensex was down only 12 points at 8415.
The dollar climbed to its highest in more than three months against the euro on Wednesday. Bonds are trading higher on expectations of a rate cut. While the yield on the old 10-year benchmark 8.24% paper maturing in 2018 fell marginally to 6.37%, the new benchmark 6.05% paper expiring in 2019 rose slightly at 6.10%. When bond prices fall, yields rise.
RBI has announced another buyback of dated government securities worth Rs 6,000 crore with a green-shoe option of Rs 3,000 crore through an auction on March 5. The next day the government will sell three dated securities for Rs 12,000 crore. Dealers said these two events would dictate yields in the coming days.
The rupee has fallen 2% so far this week, close to 5% in the past few sessions and 6.7% in 2009. Barclays expects the rupee to weaken to 56 by June. The currency weakened earlier in the day for an eighth day to 52.04, the longest losing streak since October, the last time it fell from 47 to near 50 levels. The rupee had touched an all time low of 52.18 against the dollar on Tuesday.
"Some foreign banks were seen selling dollars, but the activity is really not much," says a dealer at DCB. "There is not much RBI intervention and the stock market holding on is stemming the bearish sentiment," he added. BSE sensex was down only 12 points at 8415.
The dollar climbed to its highest in more than three months against the euro on Wednesday. Bonds are trading higher on expectations of a rate cut. While the yield on the old 10-year benchmark 8.24% paper maturing in 2018 fell marginally to 6.37%, the new benchmark 6.05% paper expiring in 2019 rose slightly at 6.10%. When bond prices fall, yields rise.
RBI has announced another buyback of dated government securities worth Rs 6,000 crore with a green-shoe option of Rs 3,000 crore through an auction on March 5. The next day the government will sell three dated securities for Rs 12,000 crore. Dealers said these two events would dictate yields in the coming days.
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