The rupee ended at its lowest level since September 2004 on Thursday as the dollar rose overseas and banks stepped up purchases of the US currency to arbitrage against a costlier dollar in the offshore forwards market.
The partly convertible Indian rupee fell for a second day to close at 45.9950/46.0050 per dollar, 0.14 percent weaker than Wednesday's 45.93/94. It hit 13-month intra-day low of 46.06 in early November.
Foreign investors and banks often seek to capitalise on the difference in the rupee's value in the domestic forwards market and offshore non-deliverable forwards (NDF). "There is a 10-15 paise arbitrage on the one-month and three-month NDF and that drove dollar buying today. This is likely to continue in the coming session as the view for the dollar is bullish," said a dealer at a state-run bank.
The dollar hit a 28-month high above 120 yen on Thursday on optimism the US Federal Reserve would keep up its interest rate increases.
Traders were awaiting the European Central Bank's interest rate decision later in the day and economic data scheduled to be released from the United States, including the Institute for Supply Management's manufacturing index and the November jobs report, which is due on Friday.
Comments
Comments are closed.