Re off from 2.5-month low

The rupee came off from 2-1/2-month low of 63.32 registered on Monday following further stimulus tapering by US Federal Reserve and month-end dollar demand from importers, mainly oil refiners, recovered later to close down by a mere two paise at 62.68 against the greenback during the week.

Weakness in local equities and fresh capital outflows also later weighed on the rupee. Indication of end in further hike in the key interest rates by the Reserve Bank of India (RBI) helped the rupee to recover some ground.

At the Interbank Foreign Exchange (Forex) market, the rupee commenced lower at 62.84 a dollar from previous week’s close of 62.66 and immediately touched a low of 63.32 -level not seen since November 14, 2013 when it had touched an intra-day low of 63.34. It later recovered and logged a high of 62.1050 before settling the week at 62.68, revealing a fall of two paise or 0.03 per cent. Last week, it has plunged by 112 paise or 1.82 per cent.

Pramit Brahmbhatt, CEO, Alpari Financial Services (India) said, “Rupee started the week on a weak note but slowly gained during the week, still closing on a negative note. Rupee traded strong on Tuesday mainly after RBI surprisingly raised interest rates to reduce inflation and also stated that if retail inflation eases as projected, it does not foresee further near-term monetary policy tightening.”

He added, “Local equities continued to fall and closed down at a 9 week low. The trading range for the spot rupee is expected to be within 62.00 to 63.50.” 

"The rupee ended on a weak note against the dollar as Fed took the decision of cutting the stimulus by $10 billion. All the emerging nations were seen getting hit due to this decision," Abhishek Goenka, CEO, India Forex Advisors, said. Across emerging markets, currencies including Brazil's Real, Colombian Peso, Indonesia's Rupiah, Philippine 
Peso, China's Renminbi, Polish Zloty, Russia's Ruble and Turkish Lira dropped against the dollar on fears of capital outflows. The benchmark six-month forward dollar premium payable in July closed the week at 252-254 paise. Far-forward contracts maturing in January ended at 494-496 paise.