MUMBAI: The Indian rupee fell to its lowest in more than a week on Monday after data showing a fall in inflation in China and weaker-than-expected US jobs growth data sent global risk assets lower.
No signs of intervention from the central bank were spotted, unlike on Friday, when the Reserve Bank of India unexpectedly sold dollars.
Monday marked the fourth consecutive losing session for the rupee, as it slowly begins to approach the record low levels of 57.32 hit on June 22.
"The rupee remains hostage to capital flows given the current account and fiscal deficits," said Nizam Idris, head of Asian fixed income and currencies at Macquarie Bank.
He expects the rupee to trade in a wide 54-58 to the dollar range, with an upward bias.
"INR really needs a sustained fall in oil prices and positive global market sentiment to turn the recent trend of weakness."
The partially convertible rupee closed at 55.92/93 as per the SBI closing rate, down from its Friday's close of 55.42/43.
The rupee had fallen to as low as 56.07 during trade, its weakest since June 29.
Still, NDFs are not yet pricing in a resumption to record lows.
The one-month offshore non-deliverable forward contracts were quoted at 56.26 while the three-month were at 56.91.
In the currency futures market, the most traded near-month dollar-rupee contract on the National Stock Exchange, the United Stock Exchange and the MCX-SX all ended at around 56.13. The total volume was at $3.9 billion.-Reuters
No signs of intervention from the central bank were spotted, unlike on Friday, when the Reserve Bank of India unexpectedly sold dollars.
Monday marked the fourth consecutive losing session for the rupee, as it slowly begins to approach the record low levels of 57.32 hit on June 22.
"The rupee remains hostage to capital flows given the current account and fiscal deficits," said Nizam Idris, head of Asian fixed income and currencies at Macquarie Bank.
He expects the rupee to trade in a wide 54-58 to the dollar range, with an upward bias.
"INR really needs a sustained fall in oil prices and positive global market sentiment to turn the recent trend of weakness."
The partially convertible rupee closed at 55.92/93 as per the SBI closing rate, down from its Friday's close of 55.42/43.
The rupee had fallen to as low as 56.07 during trade, its weakest since June 29.
Still, NDFs are not yet pricing in a resumption to record lows.
The one-month offshore non-deliverable forward contracts were quoted at 56.26 while the three-month were at 56.91.
In the currency futures market, the most traded near-month dollar-rupee contract on the National Stock Exchange, the United Stock Exchange and the MCX-SX all ended at around 56.13. The total volume was at $3.9 billion.-Reuters
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