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Rupee ends at 2-month low of 54.88

Monday, 12 November 2012 - 6:08pm IST | Place: Mumbai | Agency: PTI

Rupee down 13 paise on tepid economy data

Falling for the third straight session, the rupee on Monday closed at a fresh two-month low of 54.88, down 13 paise, after falling below the key 55-level on poor industrial production data, record-high trade deficit and sticky retail-level inflation.

Sustained demand of the American currency from importers, some weakness in local equities amid fresh capital outflows also weighed on the rupee, forex brokers said.

At the Interbank Foreign Exchange (Forex) market, the domestic unit resumed better at 54.68 a dollar from last Friday's close of 54.75 and immediately touched a high of 54.61 on initial firm trend in local stock market.

However, an unexpected 2.5% fall in Index of Industrial Production (IIP) data for September, rise in retail inflation to 9.75% and record-high trade deficit at $20.96 billion in October pulled the rupee to a low of 55.12 as dollar demand surged.

However, with the dollar index quoting lower by 0.10% against a basket of currencies, the rupee recovered some ground to end at 54.88, still showing a loss of 13 paise or 0.24% over Friday's close.

"Poor economic indicators led to the depreciation of rupee against dollar. Weaker-than-expected IIP and widening trade deficit contributed to the rupee moving to the 55-levels," said Abhishek Goenka, Founder & CEO, India Forex Advisors.

New York crude oil was trading around $85.5 a barrel in European market on Monday.

Pramit Brahmbhatt, CEO, Alpari Financial Services (India) said,"The October exports were just half of the total imports last month, which also weighed on the rupee."

India's exports in October contracted 1.63% for the sixth month in a row to $23.2 billion while imports grew by 7.37% to $44.2 billion.

Meanwhile, the Indian stock market benchmark Sensex on Monday ended the Samvat year 2068 on a slightly bearish note, down 13.34 points at 18,670.34.

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