Rupee weakens by 17 paise against USD

The Indian rupee depreciated by 17paise to 47.24 against the dollar in early trade on Thursday as banks bought the currency (dollar) on behalf of importers and after the USD stabilised against a basket of currencies in Asian markets.

At the Interbank Foreign Exchange (Forex) market, the local unit, which had ended six paise costlier at 47.07/08 on Wednesday, fell further to quote at 47.24.



Besides the greenback strengthening against other Asian currencies, expectations of a weak opening in the equity markets, in tandem with other Asian bourses, affected the rupee sentiment, forex dealers said.



The Asian markets are trading low by 1.5 per cent in early trade on Thursday.

Indian growth unexpectedly strong

India's economy grew 5.8% in the first three months of the year compared with the same period last year, which was better than had been expected.

The official gross domestic product figure was down from 8.6% annual growth seen in the first quarter of 2008.

Although growth has slowed from last year, the economy is still expanding faster than most other countries.

It grew 6.7% in the full financial year, which was down from a rate of 9% in the year to the end of March 2008.

'Growth bottomed out'

"The GDP growth number justifies the claim that India is dealing with the global crisis from a position of strength," said Rupa Rege Nitsure, chief economist at Bank of Baroda in Mumbai.

"This means that growth has bottomed out, or at least the deceleration has stopped."

The figures are good news for the newly-elected Congress-led government, which has made reviving growth its top priority.

Among the sectors showing an improvement was farm output, which grew at an annualised rate of 2.7% in the first three months of 2009 having contracted 0.8% in the previous quarter.

Construction grew 6.8% in the period compared with 4.2% in the previous quarter.

But the manufacturing sector contracted an annual 1.4%, having grown 0.9% in the previous three months.

Rupee surges 41 paise against dollar in opening trade

The Indian rupee on Wednesday soared by 41 paise against the dollar on anticipation of heavy foreign capital inflows as stock market may open higher in tandem with other Asian markets.

At the Interbank Foreign Exchange (Forex) market, the domestic unit was quoted at 47.51 a dollar in the opening trade, a rise of 41 paise over the previous close.

Rupee had nosedived by 64 paise to close at 47.92/93 on Tuesday, its biggest fall in almost three months.


Dealers said expectations of a surge in the domestic stock markets in line with other firming Asian markets leading to capital inflows strengthened the rupee sentiments.


However, month-end dollar demand from importers and refiners capped the rupee's gains to some extent, they added.


The Asian equity markets rose by up to 3.7 per cent in the morning trade on Wednesday.

Rupee down 22 paise against USD in early trade

The Indian rupee depreciated 22 paise against the US dollar in early trade on Monday, snapping its six-session upward journey, on expectations of fresh capital outflow by foreign funds as domestic bourses may open in the negative zone, in line with other Asian markets.

At the Interbank Foreign Exchange (Forex) market, the local unit, which had gained nearly 4.9 per cent during the last week, turned weak and fell 22 paise to 47.32 a dollar.


On Friday, the domestic currency had ended 27 paise higher at 47.10/12 against the greenback.


Forex dealers said the benchmark Sensex is likely to open on a weak note in line with other Asian markets, which are down up to 1.5 per cent, leading to capital outflow by foreign funds.


Month-end dollar demand also put pressure on the rupee, they added.

Rupee breaches 47 level to hit five-mth high of 46.98 a dlr

The Indian rupee continued its upward march for the sixth consecutive day and breached the crucial 47-level against the US currency for the first time after 19th December, 2008, on sliding dollar in the overseas markets.

The rupee also drew support from encouraging trend in the local stocks and continued optimism about faster reforms in the financial sector paving the way for increased capital inflows.



At the Interbank Foreign Exchange (Forex) market, the domestic currency resumed stronger at 47.15/20 a dollar from its previous close of 47.37/38 a dollar and later hit a five-month high of 46.98 against the American currency.



It, however, pared gains and was quoted at 47.14/15 a dollar in late morning trade.



Forex dealers said weak dollar overseas provided a fresh impetus to the Indian currency.



The dollar fell to its recent lows against the basket of currencies on fears about the US losing the AAA rating.



They said the rupee trimmed its gains due to some dollar buying by banks, probably on behalf of oil companies.

Rupee bounces back by 47 paise vs dollar

The Indian rupee on Wednesday bounced back by 47 paise to close at 50.04/05 against the dollar, in the midst of firm equity markets and a weak US currency overseas.

Fresh capital outflows amid dollar selling by foreign banks also helped the rupee recovery.



At the Interbank Foreign Exchange (Forex) market, the local currency resumed higher at 50.26/28 a dollar and moved up further to settle the day at 50.04/05, a rise of 0.93 per cent over its previous close of 50.51/52 per dollar.



It moved in a range of 50.04 and 50.30. In the last two sessions, the rupee had dropped by 71 paise or 1.43 per cent.



A sharp recovery in the Indian equity markets mainly helped the rupee rise.



The dollar's weakness against its major rivals also boosted rupee sentiment, a forex dealer said, adding that foreign banks were seen selling dollars on expectations of further fall in the American currency.

RBI Reference rate for US dollar and euro

The Reserve Bank of India on Thursday fixed the Reference rate for the US currency at Rs 48.82 per dollar and the single European unit at Rs 62.69 per euro from Rs 48.65 per dollar and Rs 63.46 per euro respectively on Wednesday.

In a press note issued in Mumbai on Thursday by the apex bank, the exchange rates of Great Britain's Pound and Japanese Yen against the Rupee have been given as Rs 70.4790 per pound and Rs 54.57 per 100 yen respectively, based on the Reference rate for US dollar and middle rates of the cross currency quotes at noon.


The Reference rate is based on 12 noon rates of a few select banks in Mumbai and the SDR-Rupee rate will be based on this rate, the release added.

RBI Reference rate for US dollar and euro

The Reserve Bank of India on Wednesday fixed the Reference rate for the US currency at Rs 48.87 per dollar and the single European unit at Rs 64.76 per euro from Rs 48.85 per dollar and Rs 64.51 per euro respectively on Friday.

In a press note issued in Mumbai by the apex bank, the exchange rates of Great Britain's Pound and Japanese Yen against the Rupee have been given as Rs 69.7204 per pound and Rs 54.82 per 100 yen respectively, based on the Reference rate for US dollar and middle rates of the cross currency quotes at noon.


The Reference rate is based on 12 noon rates of a few select banks in Mumbai and the SDR-Rupee rate will be based on this rate, the release added

Rupee rises; up by 21 paise to 48.90 a dollar

The Indian rupee appreciated 21 paise against the US currency on Thursday in early trade on dollar selling by banks and exporters amid hopes of firm opening on the domestic stock markets in line with better trends on other Asian bourses.

At the Interbank Foreign Exchange (Forex) market, the domestic currency traded higher at 48.90 against the US

currency, a rise of 21 paise over the previous close of 49.11/12 a dollar.



On Wednesday, the rupee gained 9 paise to close at 49.11/12 a dollar.



Forex dealers said dollar selling by banks, recovery on the Asian equity markets and hopes of Indian stock markets opening higher, helped the rupee to strengthen.



The dollar's weakness against some other Asian currencies also supported the rupee, they said.



Among Asian markets, Hong Kong's Hang Seng rose 1.23 per cent, while Japan's Nikkei remained almost flat in early trade on Thursday.

Rupee weak at 48.57 a dlr in early trade

The Indian rupee depreciated, in tandem with weakness in local stocks, and was quoted 25 paise lower at 48.55/57 against the greenback in early trade on Monday on some dollar demand from importers.

In lacklustre activity at the Interbank Foreign Exchange (forex) market, the domestic currency resumed weak at 48.53/55 a dollar from its last close of 48.28/29 a dollar and was steady at 48.55/57 a dollar in late morning deals.



Forex dealers said the rupee continued to remain under pressure as the Satyam accounts' scandal triggered fears of more capital outflows from the country despite some leading fund managers ruling out possibility of any capital outflow because of the Satyam fiasco.



They said oil refiners bought dollars as the global oil prices fell to around USD 40 a barrel level in Asian trade on Monday morning.



The Indian benchmark Sensex was down 268 points at 1030 hours after some foreign brokerages pointed to disappointing third quarter earnings likely to be affected by high input costs and the current liquidity crisis.

Rupee appreciates 61 paise against dollar

The Indian rupee strengthened by 61 paise against the US currency on Wednesday in opening trade on increased capital inflows by foreign funds amidst firming Asian equity markets, dollar selling by exporters and weakening of dollar against other currencies.

At the Interbank Foreign Exchange (Forex) market, the domestic currency traded at 47.30 against the greenback, a smart rise of 61 paise over the previous close of 47.91/92.



Forex dealers said that the rupee gained on dollar selling by banks and exporters after an upward trend in Asian equity markets raised hopes for strong opening on domestic bourses.



Asian markets on Wednesday opened higher with Hong Kong's Hang Seng going up 2.7 per cent, while Japan's Nikkei 225 was up nearly one per cent in early trade.



The rupee, appreciated by 13 paise at 47.91/92, a one-month high in the last trading session.



Meanwhile, the BSE Sensex closed 144.59 points higher at 9976.98 on Tuesday.

RBI cuts Repo, Reverse Repo rate by one pc

In a move that could help bring down commercial interest rates, the RBI on Saturday announced a slew of measures, including a one percentage point cut in short-term rates at which it lends and borrows from banks and pumped in Rs 11,000 crore to prop up realty and small industry sectors.

The repo rate, at which the apex bank lends overnight funds to banks, was reduced from 7.5 per cent to 6.5 per cent while the reverse repo rate, at which its accepts deposits from banks, was slashed to 5 per cent from 6 per cent with effect from 8th December.

"It is our expectation that the banks will take a signal from the rate cuts," RBI Governor D Subbarao said announcing the measures, which he said, along with steps taken since October, would infuse over Rs 3,00,000 crores into the system.



The liberal monetary policy stance has been prompted by the lowering of inflation, which Subbarao said would come down further due to the reduction in petrol and diesel prices announced on Friday.



Saturday’s package from RBI is aimed at furthering the economic growth, as Subbarao said, "There is evidence of economic activity slowing down, real GDP growth has moderated in the first half of 2008-09".



"Industrial activity, particularly in the manufacturing and infrastructure sector is decelerating... recent data indicate that the demand for bank credit is slackening despite comfortable liquidity. Higher input costs and dampened demand have denied corporate margins, while the uncertainty surrounding the crisis has affected business confidence," he said.



Sensing the impending crisis, the RBI had started liberalising the policy a reversal of earlier stance to control high inflation from October as part of which it cut Cash Reserve Ratio from 9 per cent 5.5 per cent till now.



But this is the first cut in reverse repo since 2003.



In order to improve credit flow to the fund-starved micro and small enterprises, the RBI announced a Rs 7,000 crore refinancing facility to SIDBI.



The banking regulator also announced a similar Rs 4,000 crore facility to National Housing Bank and would come out with the details of this package next week.



The apex bank also decided to classify housing loans below Rs 20 lakh from housing finance companies to individuals under the priority sector, but said banks can lend only five per cent of their total priority sector lending under this category.



Given the stress in realty sector, the apex bank also allowed banks to consider their commercial real estate exposure, which are restructured up to 30th June, under the standard category that would help lenders not consider these accounts as bad assets.



RBI steps to boost credit flow to realty sector



In order to increase the flow of funds to the sagging real estate sector, the RBI today announced a slew of measures including a Rs 4,000-crore refinance facility for the National Housing Bank and priority sector status for housing loans up to Rs 20 lakh.



"We are working on a refinance facility for the National Housing Bank (NHB) of an amount of Rs 4,000 crore," RBI Governor D Subbarao said.



According to current norms, a bank has to set aside 40 per cent of its deposits for lending under the priority sector head.



The RBI said banks can classify housing loans up to Rs 20 lakh as "priority sector" advances, subject to a ceiling of 5 per cent of their total priority sector target.



Loans by banks to housing finance companies (HFCs) for on-lending to individuals for purchasing or constructing dwelling units may be classified under the priority sector, provided the housing loans granted by HFCs do not exceed Rs 20 lakh per dwelling unit per family, the statement said.



The special dispensation for treating loans to HFCs as priority sector advances will boost lending to the housing sector, Subbarao said, adding this would apply to loans granted by banks to HFCs up to 31st March, 2010.



The RBI has also relaxed asset classification norms for commercial real estate advances to encourage banks to increase their exposure to the sector.



"The facilities for restructuring exposures will help soften pressures being faced by the commercial real estate and other sectors in the current environment", the Governor said.



Commenting on the RBI decisions, ICICI Bank Joint Managing Director Chanda Kochhar said, "We have brought down interest rates for housing loans below Rs 20 lakhs."



RBI said that under the existing norms, exposure to commercial real estate, capital market exposures and personal/ consumer loans are not eligible for the exceptional regulatory

treatment in retaining the asset classification of the restructured standard accounts in standard category.



"As the real estate sector is facing difficulties, it has been decided to extend exceptional/concessional treatment to the commercial real estate exposures which are restructured up to June 30, 2009," it added

Rupee drops by another 57 paise against USD in early trade

The Indian rupee on Wednesday dropped further by 57 paise to 48.68/69 against the US currency in late morning deals following sustained weakness in equity markets and expectations of more capital outflows.

In active trade on the Interbank Foreign Exchange (forex) market, the local unit resumed sharply lower at 48.45/47 a dollar and dipped further to quote at 48.68/69 in late morning deals.



On Tuesday, the rupee had tumbled by 73 paise. It moved in a range of 48.44 and 48.81 in early trade.



Forex dealers attributed weakness in the rupee to bearish equity markets.



Indian benchmark Sensex on Wednesday was down by over 74 points at 1030 hrs while most of the Asian indices were also trading in negative terrain on the back of fall on Wall Street on Tuesday night.



Expectations of more capital outflows due to sustained sluggishness in stock markets amid prolonged global economic slowdown.



Fall in the collections of excise duty and customs duties during October 2008 also displayed possibility of losing pace in the domestic economic growth, which also partly on the rupee sentiment.

Govt approves capital restructuring of UCO Bank

The government announced capital restructuring of Kolkata-based UCO Bank by converting Rs 250 crore equity into preference shares that will enable the PSU lender to raise funds from the market.

"The reduction in the pure equity capital will improve the EPS and other financial so that the bank will have more attractive capital structure," Finance Minister P Chidambaram told reporters while briefing on Cabinet decisions taken on Thursday night.



If and when it approaches capital market it will have attractive capital structure and it can raise Tier I capital, he said.



This conversion of equity into perpetual non-cumulative preference shares is in accordance with RBI circular of 29th October, 2007, he said.



UCO Bank has equity capital of Rs 799.36 crore, the highest among all the listed public sector banks.



Chidambaram said, this high equity base suppresses Earning Per Share (EPS). Besides, it is difficult to service high portion of equity.



The bank, he said, had submitted a proposal for structuring government equity by converting a portion of the equity capital held by the government into perpetual non-cumulative preference shares. Perpetual non-cumulative preference shares are also part of Tier I capital, he said.



Asked about interest that would be paid on the preference shares, Chidambaram said, coupon rate would be benchmarked to the repo rate plus 100 basis points.



This would be re-adjusted annually based on prevailing repo rate on the relevant date.

Rupee plunges to 49.07 against US dollar in early trade

The Indian rupee on Friday fell to more than six-year low of 49.07 against the US dollar at 0940 hrs owing to deepening global financial crisis amid weak Asian stock markets.


The level was last seen in May 2002.



At the Interbank Foreign Exchange (Forex) market, the domestic unit, which fell to 48.80 and closed at 47.99/48.00 on Wednesday, on Friday lost further ground by falling by Rs 1.08 at 49.07 against the greenback.



The local unit was trading at 49.02 a dollar in early trade before trading at 49.07.



Meanwhile, exporters and economists had said that the Indian currency may fall to 50 a dollar in the next two months in the wake of global financial crisis.

Rupee fell to 47.30 against US dollar in early trade

The Indian rupee on Monday plunged by 21 paise to 47.30 against the US dollar in early trade on Monday on fears of capital outflow by foreign funds due to melting stock markets.


At the Interbank Foreign Exchange market (Forex), the domestic currency, which ended 47 paise lower to five-year low of 47.09/10 a dollar on Friday, depreciated by another 21 paise despite selling of dollars by state-run banks to curb fall in rupee value.


The Bombay Stock Exchange benchmark Sensex was down by 340.40 points to 12,185.92 in opening trade.
Similarly, Nifty fell by 119.95 points to 3,698.35.

Rupee falls to 47.11 against US dollar in early trade

The Indian rupee plunged by 49 paise to a five-year low of 47.11 against the US dollar in opening trade on Friday following increased demand for the greenback from importers.


At the Interbank Foreign Exchange market (Forex), the domestic currency, which touched a five-year low of 47.25 on Wednesday but closed the day stronger by 34 paise at 46.62/63, depreciated by 49 paise to 47.11 against the greenback.

The currency market was closed on Thursday on account of Gandhi Jayanti and Id-ur-Fitr.

RBI move to reduce pressure on rupee: Citi

Citigroup India, in a note released on Wednesday said the Reserve Bank measures announced last evening would help reduce the pressure on rupee.

Rohini Malkani, economist, Citigroup India said the RBI could become more active in the coming months.

She said given the volatile market situation, near term rupee weakness is likely to continue and could trade in the Rs 45-47 range. But over a longer term , ''we maintain our rupee appreciation view and expect the unit to trace back to Rs43-44 levels by March 09.'', she said.

Rupee which almost touched 47 mark on Tuesday recovered today to 46.34 levels.

According to Malkani, the key reasons for the 10 per cent depreciation in rupee in the past month were the strong dollar rally and acute dollar shortage in the local market coupled with the dis-continuation of the Special Market Operation Scheme (where RBI provided dollars to the oil companies in lieu of oil bonds).

The dollar shortage was a result of continued portfolio flows, offshore demand and demand from oil companies, she said while adding that exporters are now holding back from selling.

Rupee trades at 46.28 per dollar

Mumbai: The rupee rose by 60 paise to 46.28 against the US dollar in early trading today, paring yesterday's record loss of 90 paise on expectations that the Reserve Bank may intervene to stem the rupee fall.

The rupee resumed stronger at 46.38/40 a dollar from Tuesday's close of 46.89/90 a dollar, aided by a recovery in stock prices in other Asian exchanges and the RBI moves to augment dollar supply.

The RBI yesterday asked public sector banks to raise dollar deposit rates for non-resident Indians and said it would continue to sell dollars as the rupee continued to slide.

RBI also decided to allow banks to borrow more by relaxing the statutory liquidity ratio (SLR) to ease the liquidity crunch and bolster the sliding currency. The central bank also expanded the liquidity adjustment facility scheme.Foreign banks are also reported to have sold dollars in the forex market after the RBI's steps to cool the financial markets.

The rupee had lost Rs2.29, or 5.13 per cent, in the last six days alone amidst heavy capital outflows and heavy dollar demand.

Foreign funds have so far sold a net $8.4 billion worth of stocks, driving the rupee down more than 15 per cent so far in 2008.

The dollar's strength against other currencies also seems to have impacted the rupee value.

Indian rupee weakens as stronger dollar weighs

MUMBAI, Aug 25 (Reuters) - The Indian rupee weakened on Monday as the dollar rose against a host of currencies, with heavy demand for the U.S. unit from local oil refiners adding to the downward pressure.

The partially convertible rupee ended at 43.79/80 per dollar, 0.8 percent weaker than Friday's close of 43.425/435. It hit a 17-month low of 43.87 last week.

The rupee has shed 2.8 percent in August, taking its losses to 10 percent so far in 2008.

"Rupee depreciated due to the dollar's recovery against majors and other Asian currencies. There was also some dollar demand from oil companies and squaring of short speculative dollar positions,"said L. Subramanian, the chief dealer with ICICI Bank.

One-month offshore non-deliverable forward contracts PYNDF were quoting at 43.96/44.03, weaker than the onshore rate.

The British pound hit two-year lows against a broadly stronger dollar on Monday, with stalled UK economic activity seen as another example of growing economic malaise outside the United StatesDealers said dollar demand from oil refiners, the largest buyers of the U.S. currency in the local market weighed on the local unit.

Oil CLc1, India's biggest import, was trading above $115 as some investors saw buying opportunities after prices posted their biggest one-day slide in percentage terms since 2004 in the previous session. See [O/R].

Indian shares posted a modest gain on Monday after an early rally ran out of steam. Foreigners have been net sellers of more than $7 billion of stocks so far this year, a sharp turnaround from 2007 when record net inflows of $17.4 billion pushed the rupee towards 10-year highs.