Rupee drops to 3-week low as shares tumble

[Ranga_The_Donga]

MUMBAI: The Indian rupee fell to a three-week low on Monday tracking sharp losses in shares which raised concerns of foreign fund outflows, while some dollar demand from oil firms and importers also weighed.

The partially convertible rupee closed at 45.45/46 per dollar, after falling as low as 45.5175 during trade, its weakest since Dec. 20 and 0.15 percent below Friday's close of 45.38/39.

"Rupee weakened mainly tracking the equity market. Lots of foreign fund outflows were seen. Oil demand was there too," said Vikas Chittiprolu, a senior foreign exchange dealer with state-run Andhra Bank .

"45.65 is a key level to watch. We should see the market touching that level tomorrow, so weakness will continue. But exporters interest to sell is keeping losses buffered."

Indian shares tumbled 2.4 percent to six-week closing lows, led by financials, on rate increase jitters and fund inflow slow down fears, with quarterly earnings which begin this week eyed for more cues.

Foreign funds sold shares worth $212.6 million on Friday, taking net outflows so far this year to $10.7 million. The rupee had gained 4.1 percent in 2010 on record $29.3 billion inflows.

The central bank is scheduled to review monetary policy on Jan. 25, when it is widely expected to raise rates.

Traders said there was some dollar demand from oil importers, the largest buyers of dollars in the domestic currency market.

"There were no specific names heard, but foreign banks were on the bidding side mainly tracking euro and stocks," said Hari Chandramgathan, a foreign exchange dealer with Federal Bank .

The euro dipped to a four-month low against the dollar on Monday on mounting worries about Europe's debt crisis, after a source said Portugal was under growing pressure to accept EU/IMF aid.

Traders said the rupee had risen earlier in the session on hopes for some inflows into stocks and as sentiment was lifted by a much smaller-than-expected trade deficit in December.

India's trade deficit in December narrowed to $2.6 billion from $8.9 billion in November, the lowest in the last three years, Trade Secretary Rahul Khullar said on Saturday.

One-month offshore non-deliverable forward contracts were quoted at 45.77, weaker than the onshore spot rate.

In the currency futures market, the most traded near-month dollar-rupee contracts on the National Stock Exchange, MCX-SX and United Stock Exchange all closed at 45.60, with total traded volume on the three exchanges at $5.7 billion.

[StoneCold]

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[bhrami]

*=: *=: *=: *=: Still online SBI showing 44.95  sCo_hmmthink sCo_hmmthink sCo_hmmthink sCo_hmmthink

[Ranga_The_Donga]

[quote author=StoneCold link=topic=141907.msg1612790#msg1612790 date=1294672404]
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[/quote]

eppudu 1 min lo vesav....paiki choodu.... sFi_boink3 sFi_boink3

[bhavanavenu]

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[StoneCold]

[quote author=Ranga_The_Donga link=topic=141907.msg1612794#msg1612794 date=1294672470]
eppudu 1 min lo vesav....paiki choodu.... sFi_boink3 sFi_boink3
[/quote] LoL.1q LoL.1q I will follow the rupee value daily....So I know what you posted  sHa_high5ing sHa_high5ing sHa_fr1ends