News Column

Rupee depreciates further

June 3, 2014

Bloomberg News



Mumbai: Indian rupee fell for a fourth day, the longest declining streak since November, amid trader talk that state-owned lenders bought dollars on behalf of the Reserve Bank of India (RBI).



The central bank may be intervening to bolster its foreign- currency reserves and to reduce rupee volatility after it allowed foreign investors in the local derivatives market, said Manis Thanawala, a director at Greenback Forex Services in Mumbai.



The rupee fell 0.4 per cent to 59.39 per dollar in Mumbai, according to prices from local banks compiled by Bloomberg. It has dropped 0.8 per cent since May 28.



The central bank on Tuesday allowed foreign investors to access the domestic exchange-traded currency derivatives market, a move that will narrow the spread between onshore forwards and non- deliverable forwards, Mirza Baig, BNP Paribas SA's Singapore-based head of Asia foreign-exchange and interest-rate strategy wrote in a note yesterday. The currency rallied 2.1 per cent last month, the most in Asia, as global funds pumped $6.2 billion into local bonds and stocks on optimism a new government will boost growth.


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Source: Times of Oman