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Indian Rupee

Rupee Heads for Biggest Monthly Decline in a Year

Indian rupee headed for its worst month in a year on concern any reduction in bond-buying by the Federal Reserve will curb dollar supply, leaving the Asian currency vulnerable to a record current-account deficit.

The rupee weakened 4.8% this month to 56.53 against US$ as of 10:16 a.m. in Mumbai, the biggest loss since May 2012, It dropped 0.3% today, touching the weakest level since June 29, 2012, and fell 1.6% this week.

India’s balance of payments is under stress, RBI Governor Duvvuri Subbarao said in Ahmedabad yesterday, adding that it is a challenge to attract stable capital flows.
"The shortfall in the current account, the broadest measure of trade, probably widened to a record of around 5% of GDP in the year ended March 31.Global funds have been net sellers of rupee-denominated debt each day since holdings touched a record $38.5 billion on May 21, exchange data show, while they have bought $14.9 billion more of Indian stocks than they sold this year. Asia’s third-largest economy should be prepared for the probability of outflows in 2014 as developed economies consider withdrawing stimulus measure" Governor Subbarao said this month.

3-month onshore INR/USD forwards traded at 57.45, compared with 54.84 on April 30. Offshore non-deliverable contracts were at 57.48 versus 54.54 a month ago. Forwards are agreements to buy or sell assets at a set price and date. Non-deliverable contracts are settled in dollars.

Comments

  1. Abhikhos275 June 2013 at 23:05

    rupee close 57 rupees to dollar we recommend and the result is on the screen for everyone to see

    ReplyDelete

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