Mumbai, April 08: The Indian rupee weakened further on Thursday from 19-month highs as the stock market dropped after a four-day rise and weighed down by a stronger dollar overseas.
“Stocks are down, Asians are weak and there are no inflows from the custodian side,” said a senior trader at a foreign bank, referring to the banks who handle foreign portfolio investments.
At 10:45 a.m. (0515 GMT), the partially convertible rupee was at 44.62/63 per dollar, weaker than the previous close of 44.54/55.
The main BSE share index was was down 0.3 percent, taking cues from world markets that fell on worries US interest rates may not stay at their current lows and on fresh concerns on Greece’s debt woes.
Traders said state-run banks were not very active after they had bought dollars on Wednesday, probably on behalf of the central bank, to rein in the rupee after it had climbed to 44.31 during trade, its strongest since Sept. 8, 2008.
The rupee is likely to move in a 44.50-44.70 band during the day, with oil companies’ dollar buying likely at 44.55/56, traders said.
“Exporters may come in to buy rupee at 44.70 as it is a good level for them,” said another foreign bank dealer. The one-year forward dollar premium was steady at 3.06 percent, while the one-month offshore non-deliverable forward contracts were at 44.61/64, near the onshore spot rate.
In the currency futures market, the most traded near-month dollar-rupee contracts on the National Stock Exchange were at 44.6900, and at 44.6925 on the rival MCX-SX. Most Asian currencies were weaker against the dollar on Thursday.
The index of the dollar against six major currencies was up 0.23 percent. The euro hovered within reach of this year’s low against the dollar after Greece’s borrowing costs hit a new high and its banks asked for support.
—–Agencies