India's rupee fell on Wednesday as a plunge in the equity market triggered by the country's biggest corporate scandal in memory raised concerns of foreign fund withdrawals, but broad weakness in the US unit limited losses. The partially convertible rupee closed at 48.80/81 per dollar, 0.3 percent weaker than its previous close of 48.66/69.
"The rupee weakened because of the drop in shares but the slippage in the dollar globally helped," a senior dealer at a private bank said. Shares in Satyam Computer Services plunged nearly 78 percent after the Indian outsourcer said it had overstated profits for many years.
One-month offshore non-deliverable forward contracts were at 48.97/49.07, weaker than the onshore spot rate. "48.20 to 49 is still the rupee range. I reckon the overall stock market selloff is a bit of a knee-jerk reaction, so I see some pullback and recovery on Friday, even in the rupee, unless global stocks slump," the senior dealer said. All India's financial markets will be shut on Thursday for a local holiday.
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