Rupee falls on high dollar demand from corporates – Market News –

Rupee falls on high dollar demand from corporates – Market News

The Rupee on Tuesday lost ground to fall below the 83.40 mark, weighed down by demand for dollars from multinational companies as also importers. The fall in rupee was in sync with the trend in other Asian markets with most regional currencies also depreciating against the greenback.

The local unit moved between an intra-day low of 83.41 and a high of 83.37 against the greenback to settle at 83.39. “The Rupee closed slightly weaker as the dollar index rebounded on Tuesday after three consecutive weeks of fall and uptick in the US 10-year bond yields,” said Rahul Kalantri, VP Commodities, Mehta Equities, said.

The dollar index, which measures the value of the dollar against six currencies, was hovering around close to 103.6 on Tuesday compared to 102.58 at the end of November.

 “Dollar outflows are higher during the year-end as MNCs repatriate dollars for royalty and dividend payments.This demand could be high until mid-December,” Anindya Banerjee, VP – currency derivatives and interest rate derivatives at Kotak Securities said.

Sonal Badhan, economist, Bank of Baroda, said strong dollar demand from importers has been fuelling the weakness in rupee, even as the macro backdrop has been supportive. “US treasury yields, which had traced multi-year highs last week have corrected sharply, putting further downside pressure on the dollex. While most global currencies have gained from this, the performance of rupee has been underwhelming,” Badhan added.

Kalantri noted that record gains in the domestic equity markets, gains in the Japanese Yen and a steep fall in crude oil supported the rupee at lower levels. “We expect the rupee to remain volatile and the pair could trade in the range of 83.20-83.70,” he added. 

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