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Rupee drops 1.5% as US goes to polls

Tuesday, 6 November 2012 - 9:14am IST | Place: Mumbai | Agency: DNA
The rupee fell to a month-and-a-half low versus dollar as traders squared off positions ahead of the tight US presidential elections.

The rupee fell to a month-and-a-half low versus dollar as traders squared off positions ahead of the tight US presidential elections.

Dollar-buying by Indian oil marketing companies and other corporate bodies also added to the downward pressure on the exchange rate.

On Monday, the rupee closed at 54.61 per dollar, lower by 1.5%, or 80 paise, compared with the previous close. This was the biggest single session fall in a month for the local currency. Last week, it had lost 0.4% against the greenback.

“There seems to be risk aversion ahead of the presidential polls in the US leading to a stronger dollar,” said a forex trader with a large public sector bank.

The dollar index as measured against six global currencies rose to near two-month high to around 80.75 levels as against 80.59 levels seen last week. The euro was trading at $1.2785 levels from the close of $1.2835 last week.

As per the Bombay Stock Exchange, there were inflows of `373 crore from foreign institutional investors in Indian equity markets that closed almost flat.

According to traders, there was lack of dollar supply from exporters that added to the pressure as well. In October, the rupee depreciated by 1.8% after gaining 4.8% in the previous month.
Market participants were of the view that the rupee may fall further to 55-56 per dollar levels by the end of November 2012.

 


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