MUMBAI: The domestic currency fell to an 11-month low of 56.76 against the dollar on Friday on the back of what dealers said was dollar purchases by defence and oil refiners. However, there was a correction with sales from exporters pulling back the rupee to 56.51 level towards close - down 13 paise from its previous close of 56.38.
"It was not necessarily an India story. The dollar has been gaining against all emerging market currencies following signs that the US economy is on the mend. Besides expectations that there will be a gradual reduction in quantitative easing there has been a massive sell-off in emerging market ETFs (exchange traded funds)," said Harihar Krishnamoorthy, treasurer, First Rand Bank.
The rupee, which traded at 53.82 at the beginning of the month, has slipped by 2.69 paise in four weeks - its biggest monthly decline in a year. Its lowest in the last 12 months was 57.14 on June 27, 2012. On Friday, sentiments were hit by a 455-point drop in the sensex which again tracked global movements particularly a sharp fall in the Nikkei in the previous day which had wiped out all of the gains by Japanese index in May. News that the gross domestic product grew by only 5% in FY13 did not surprise the market but acted as a dampener on sentiments.
Dealers said that the rupee appears to have found support at the current level having recovered nearly 25 paise without RBI intervention. However, some traders said that there were some dollar sales by public sector banks and these could have been at the behest of the central bank. In the forward market the one year forward rupee was dealt at 60 against the dollar. The fall in the rupee was, however, good news for IT stocks with the BSEIT index rising by almost 1%.
Source:-http://timesofindia.indiatimes.com
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