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Rupee depreciates to 11 week low on global meltdown qualms

09 Aug 2011 Evaluate

Indian rupee depreciated to a eleven week low on Tuesday amidst the buzz that the central bank may intervene to stem rupee volatility given the developments in the US and Europe. The local currency slid for the sixth consecutive session owing to the heightened worries over about foreign fund outflows as investors fled risky assets across markets. Further, while a drop in world oil prices was positive for India, the country's dues of more than $3 billion for imports from Iran were an overhang for the rupee. Also, weighed on the domestic currency were the negative equities coupled with the subdued regional counterparts. However, losses of the local currency were curbed to some extent due to the weakness of the dollar overseas. The US dollar was down against most of its major counterparts on Tuesday, as investors awaited a Federal Reserve statement on monetary policy, which could provide hints regarding further easing.

Finally the rupee ended at 45.21, weaker by 24 paise from its previous close of 44.97 on Monday. It touched a high and low of 45.40 and 45.07 respectively. The Reserve Bank of India's reference rate for the dollar stood at 45.17 and for Euro it stood at 64.25 on August 09, 2011. While, the RBI's reference rate for the Yen stood at 58.42 and the reference rate for the Great Britain Pound (GBP) stood at 73.7157. The reference rates are based on 12 noon rates of a few select banks in Mumbai.

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