The Rupee fell to a one-year low of 57 against the dollar in intraday trade before recovering to 56.84 at close of trading on Thursday still down by 11 paise, due to sustaineddue to sustained dollar demand from importers and some banks amid volatile stock markets.
Dollar selling by exporters and some banks towards end of trade helped rupee recover from psychological low levels to close at 56.84, a fresh 11-month level, dealers said.
A weak dollar overseas amid capital inflows also capped the rupee fall to some extent, they said. “Heavy dollar demand and weakness in domestic equity markets added pressure on the rupee. We continue to hold a bearish outlook on the rupee and see it breaching the all time low of 57.33 levels very soon,” said Abhishek Goenka, Founder and CEO, India Forex Advisors.
At the Interbank Foreign Exchange market, the rupee resumed lower at 56.80 a dollar from previous close of 56.73 and immediately touched a low of 57.00, level not seen since June 28, 2012 when it had touched an intra-day low of 57.10.
later, the rupee recovered some ground on dollar selling by exporters to a high of 56.7850 before concluding at 56.84, still showing a fall of 11 paise or 0.19 per cent. It has plunged by 29 paise or 0.51 per cent on Wednesday
The BSE benchmark Sensex declined by 48.73 points or 0.25 per cent while FIIs infused 88.49 crore yesterday, as per provisional data with stock exchanges.
The dollar index was down by 0.22 per cent against a basket of six major currencies. “The dollar index traded weak which restricted the rupee fall. The RBI may decide against cutting interest rates this month which will help the rupee to find its direction,” Pramit Brahmbhatt of Alpari financial Services (India) said.
“Rupee has depreciated 5.2 per cent since the start of May till yesterday and has become the worst performer in Asia over this period. The trading range for the spot USD/INR pair is expected to be within 56.70 to 57.20,” he added. Gold shoots to 5-week highof Rs 28,090 per 10 g on import duty hike
With Government announcing hike in its import duty, Gold prices on Thursday jumped to to a five-week high to Rs 28,090 per 10 grams in the national capital, even as Finance Minister P Chidambaram said that banks have been asked not to sell yellow metal coins to retail customers.
The trading sentiment bolstered as Government decided to increase import duty on gold from 6 per cent to 8 per cent to curb a record current-account deficit at a time when the World Gold Council predicts record quarterly demand for the metal in India.
A firming trend in overseas markets on strong dollar and investors shifting their funds from melting equities to bullion further influenced the trading sentiment.
Gold in international markets gained as a private jobs report showed US companies hired less workers than projected in May, spurring speculation that the Federal Reserve will keep buying bonds. Gold in New York rose by 0.19 per cent to $1,402.70 an ounce.
Meanwhile Chidambaram said that as per RBI's advice, banks should not sell gold coins to retail customers. “I think the RBI has advised banks they should not sell gold coins,” he said at the AGM of the Indian Banks' Association (IBA) in Mumbai.
This is in addition to RBI's restrictions on gold imports by banks and other agencies. Banks have also been advised to restrict advances against gold coins. With the general firming trend, silver also advanced on rising demand from industrial units and coin makers.
On the domestic front, gold of 99.9 and 99.5 per cent purity shot up by Rs 430 each to Rs 28,090 and Rs 27,890 per 10 grams, respectively, a level last seen on April 29. Sovereigns addedRs 100 to Rs 24,200 per piece of eight grams. Chidambaram further said that the surging imports are unsustainable and advised the banks to tell customers not to invest in the precious metal.