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ReturnIndian rupee hits record low, bounces on cbank
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admin
PublishDate：
2008-10-28 15:26:00
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* Rupee hits 50.29/dlr on equity outflow worries
* Cbank likely sold up to $1.5 billion to lift rupee-traders
* Volatile stocks, which fell to 3-yr low, weigh on rupee
* Banks buy dollars onshore to sell offshore (Updates to close)
The Indian rupee tumbled to a record low on Monday as a wobbly stock market heightened worries about foreign fund outflows, but rebounded to finish higher on heavy dollar sales by the central bank.
The partially convertible rupee ended at 49.87/88 per dollar, 0.2 percent stronger than Friday's close of 49.950/965. It struck a record low of 50.29 during trade at which point it was down 21.6 percent in 2008.
Dealers said suspected dollar sales by the central bank was a key factor for the rupee's recovery. They estimated the Reserve Bank of India sold up to $1.5 billion to halt the rupee's slide.
State-run banks also entered into buy-sell swaps, probably on behalf of the central bank, in the forward market to alleviate the pressure on rupee liquidity due to intervention in the spot market, dealers said.
The premium on the three-month dollar-rupee forward contract maturing in January dropped to 0.385/395 rupee, from an intraday high of 0.640 rupee, dealers said.
The central bank does not comment on the daily movements in the foreign exchange market, a spokeswoman said.
The main share index .BSESN plunged as much as 11.5 percent to its lowest in three years before paring losses at close to 2.2 percent on buying by local institutions and short covering in late trade. [.BO]
Foreign funds have sold a net $12.6 billion worth of Indian stocks this year, pushing the benchmark index down 58 percent. In 2007, they had bought a record 17.4 billion last year and helped the index rise 47 percent.
Kotak Mahindra Bank warned the rupee could fall to 52.5-54.00 by the end of the year due to capital outflows and pressure on the trade deficit from falling exports.
Traders said banks were also buying dollars in the domestic market and selling them offshore, where the rupee was trading lower.
One-month offshore non-deliverable forward contracts PNDF were quoting at 52.34/54, 4.7 percent weaker than the onshore spot rate.
Bond and money markets are closed on Tuesday for a local holiday. Stocks will trade briefly in the evening. (Editing by Ranjit Gangadharan)
Source: Industry Website
* Cbank likely sold up to $1.5 billion to lift rupee-traders
* Volatile stocks, which fell to 3-yr low, weigh on rupee
* Banks buy dollars onshore to sell offshore (Updates to close)
The Indian rupee tumbled to a record low on Monday as a wobbly stock market heightened worries about foreign fund outflows, but rebounded to finish higher on heavy dollar sales by the central bank.
The partially convertible rupee ended at 49.87/88 per dollar, 0.2 percent stronger than Friday's close of 49.950/965. It struck a record low of 50.29 during trade at which point it was down 21.6 percent in 2008.
Dealers said suspected dollar sales by the central bank was a key factor for the rupee's recovery. They estimated the Reserve Bank of India sold up to $1.5 billion to halt the rupee's slide.
State-run banks also entered into buy-sell swaps, probably on behalf of the central bank, in the forward market to alleviate the pressure on rupee liquidity due to intervention in the spot market, dealers said.
The premium on the three-month dollar-rupee forward contract maturing in January dropped to 0.385/395 rupee, from an intraday high of 0.640 rupee, dealers said.
The central bank does not comment on the daily movements in the foreign exchange market, a spokeswoman said.
The main share index .BSESN plunged as much as 11.5 percent to its lowest in three years before paring losses at close to 2.2 percent on buying by local institutions and short covering in late trade. [.BO]
Foreign funds have sold a net $12.6 billion worth of Indian stocks this year, pushing the benchmark index down 58 percent. In 2007, they had bought a record 17.4 billion last year and helped the index rise 47 percent.
Kotak Mahindra Bank warned the rupee could fall to 52.5-54.00 by the end of the year due to capital outflows and pressure on the trade deficit from falling exports.
Traders said banks were also buying dollars in the domestic market and selling them offshore, where the rupee was trading lower.
One-month offshore non-deliverable forward contracts PNDF were quoting at 52.34/54, 4.7 percent weaker than the onshore spot rate.
Bond and money markets are closed on Tuesday for a local holiday. Stocks will trade briefly in the evening. (Editing by Ranjit Gangadharan)
Source: Industry Website
