The Indian rupee dampened to the lowest level in two weeks ahead of the budgetary concerns and prevailing dollar demand from the oil importers to clear their month end bills.
This was the third consecutive fall in the week, taking weekly depreciation to 0.25%. Rupee traded in broad range of 46.305-46.4425 per dollar, to end the day at 46.4137, losing close to 0.15% as compares to the Wednesday’s close of 46.3437.
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The demand for dollar is surging the forwards premium in both the on-shore and offshore i.e. Non Deliverable
The 30-share stock index closed the day on a flat note due to apprehensions on the budget. Sensex ends the day at 16254.2, ending marginally lower by 0.01% or just 2 points.
Foreign portfolio flows are the key driver of the rupee fluctuations, and data released by the SEBI suggest FII to be in net outflow status as compared to the $17.1 billion inflows in the year 2009.
The further credit rating cut for Greece by Moody, a renowned credit rating agency, for its ongoing debt issues and increase in its budgetary deficits could result in Pound and Euro to depreciate heavily against the dollar.
During the day the dollar index was up by morethan 0.25%.
Finance Minister Pranab Mukherjee would unwind fiscal stimulus measures and slow spending in an effort to shrink the 16-year-high fiscal deficit. The trend for the rupee seems to be bearish, suggestingdepreciation. Moreover the month end dollar demand factor would continue to hold its effect.
