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| Re falls 1.54%, hits 48.76 |
| BS Reporter / Mumbai Dec 24, 2008, 00:37 IST |
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The rupee fell 74 paise or 1.54 per cent today against the US dollar due to demand from importers and fall in the stock market indices.
During the day’s trade, the rupee hit 48.96 – a fall of 1.96 per cent from yesterday’s close of 48.02 — against the US currency before gaining to close at 48.76, according to Bloomberg data.
 This was the third day in a row when the rupee depreciated. The weakening was, however, in line with other Asian currencies.
Though the rupee is likely to close 2008 with the biggest depreciation since 1991, Moody’s Economy.com said the Indian currency, along with South Korean won, would be the region’s biggest gainers from improved appetite for emerging-market assets and a recovery in the global economy.
“They have the strongest potential to rebound,” Sherman Chan, an economist with Moody’s Economy.com said. “Any recovery in risk appetite should see capital flowing back in. Investment growth is also expected to pick up when the global economy recovers late next year.”
The rupee has strong potential to outperform regional currencies by late 2009 and early 2010, Chan added. During the year so far, the rupee has repeatedly hit all-time lows, with the latest being on December 2, when it touched 50.615.
Apart from purchasing dollars on behalf of importers, including oil companies, to meet their month-end requirements, banks also bought the greenback noting the dollar-rupee rise in the non-deliverable forwards market, dealers said.
Currency dealers said a large private petrochemical company bought around $100 million today and was among the major dollar buyers. A large state-owned oil company is also said to have bought dollars, while a prominent engineering company was also active on the buying as well as the selling side.
| HOW THEY STACK UP |
| Currency / dollar |
Jan 02,’08 |
Dec 23,’08 |
% chg |
| Korean won |
936.95 |
1337.25 |
-42.72 |
| Pakistani rupee |
61.32 |
78.87 |
-28.61 |
| Indian rupee |
39.44 |
48.76 |
-23.65 |
| Indonesian rupiah |
9386.00 |
11000.00 |
-17.20 |
| Thai baht |
29.75 |
34.60 |
-16.30 |
| Malaysian ringgit |
3.31 |
3.47 |
-4.87 |
| Taiwan dollar |
32.45 |
32.97 |
-1.58 |
| Singapore dollar |
1.44 |
1.44 |
-0.37 |
| Hong kong dollar |
7.81 |
7.75 |
0.79 |
| Japanese yen |
109.66 |
90.06 |
17.87 |
| Source : Bloomberg |
Banks also purchased dollars to use the arbitrage opportunity offered by in the overseas non-deliverable forwards (NDF) market.
The one-month dollar-rupee NDF rate rose to 49.15 compared with 48.41 yesterday.
Dealers said the fall in the rupee was checked to an extent as exporters sold dollars when the rupee was weaker. In addition, some banks sold forward dollars and booked profits. Volumes, however, stayed thin as the year is coming to an end.
In the forward markets, premiums ended up as banks bought forward dollars to meet demand from importers. The benchmark one-year forward premium ended at 2.81 per cent compared with 2.55 per cent yesterday.
In the currency futures market, the trends were in line with those in the spot market.
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