The Indian rupee posted its biggest single-day fall in 15 months on Wednesday as emerging market stocks tumbled following Germany's decision to tighten financial regulation while the euro's decline hurt sentiment. The partially convertible rupee closed at 46.36/37 per dollar after hitting 46.41, its weakest since February 25 and 1.64 percent below Tuesday's close of 45.60/61.
This is the rupee's biggest single-day fall since February 17, 2009, when the rupee had dropped 1.65 percent. "The weak global cues will pull the Sensex down to 16,350-16,500 which is expected to form a strong short term base. EUR/USD holding above 1.1700 and Sensex above 16,350 is essential and critical to arrest rupee weakness beyond 46.75," said J. Moses Harding, head of global markets at IndusInd Bank.
One-month offshore non-deliverable forward contracts were quoted at 46.52, weaker than the onshore spot rate. In the currency futures market, the most traded near-month dollar-rupee contracts on the National Stock Exchange and MCX-SX closed at 46.38 and 46.3925 respectively, with the total traded volume on the two exchanges at about $8.7 billion.
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