MUMBAI: The Indian rupee saw its biggest single-day fall in a week on Friday tracking a continued resurgence globally in the dollar, even as strong foreign buying continues to lift domestic share markets to record highs.
The rupee fell 0.1 percent for the week, posting its third consecutive weekly fall, despite rallies this month in debt and share markets over solid foreign buying.
Falls in emerging market currencies such as the rupee come as the dollar has strengthened. On Friday it rose to a 7-year high against the yen as investors bumped up their bets on Japan's Prime Minister Shinzo Abe calling an early election and delaying a hike in sales tax.
"There was some defence-related buying, and compared to other Asian currencies, the rupee has still not weakened as such, so some catching up there," said Uday Bhatt, a foreign exchange dealer with UCO Bank. "In the absence of any major data domestically, the rupee will hold in a 61.50 to 62.00 range early next week," he added.
The partially convertible rupee closed at 61.72/73 per dollar versus its previous close of 61.5450/5600.
The unit dropped 0.2 percent on day, its biggest single-day loss since last Friday.
Some traders speculated that state-run banks were buying dollars on behalf of the central bank, though it was not a universal view.
Traders will continue to monitor domestic share and debt markets for clues on foreign fund inflows into these markets.
Indian shares rose to a record closing high as foreign investors continued to pile into domestically oriented blue-chips.
In the offshore non-deliverable forwards, the one-month contract was at 62.01, while the three-month was at 62.56.
Comments
Comments are closed for this article.