The rupee dropped to a nine-month low against the US currency in late morning deals today and was down 18 paise to 62.14 on sustained dollar demand from importers amid strong greenback overseas. The Indian unit resumed lower at 62.03 per dollar as against the yesterday's closing level of 61.96 at Interbank Foreign Exchange market. Later, it depreciated sharply to a nine-month low at 62.22 before paring some of its losses to quote at 61.14 per dollar at 1030 hours. The rupee hovered in a range of 61.22 and 62.03 per dollar in late morning deals. Strengthening dollar overseas and higher importers' demand weighed heavily on the rupee movement, dealers said. In the New York market, the US dollar was trading strong against its major rivals and the Japanese yen slid to a seven-year low as speculators poured into carry trades funded by a tide of super-cheap liquidity from Bank of Japan.Meanwhile, the benchmark BSE Sensex was trading higher by 25 points, or 0.09 per cent, to 28,057.83 at 1050 hours.
Rupee ends little changed on EU, Japan stimulus hopes
The rupee ended little changed on Tuesday after earlier hitting a one-month low as oil companies accelerated dollar purchases, offsetting optimism that new stimulus measures in Japan would continue to push foreign investors into emerging markets. European shares rose and bond yields fell on Tuesday on strong German investor sentiment data and hopes that a possible snap election in Japan might lead to more economic stimulus measures. Any measures by Japan to stimulate its economy via monetary easing could raise expectations of inflows into emerging markets such as India at a time when the European Central Bank is also contemplating more measures of its own.But the rupee has so far failed to benefit from these expectations, given the broader global gains in the dollar, and has shed around 0.63 percent in the month so far. "The global growth scenario is far more weaker than before. The rupee should remain in the 61-62 range in the near term." said Anindya Banerjee, a currency analyst at Kotak Securities in Mumbai. The partially convertible rupee closed at 61.74/75 per dollar versus its previous close of 61.73/74, after earlier touching a low of 61.8750, its weakest level since Oct. 16. Traders said oil importers stepped up dollar purchases. The rupee also failed to give much of a lift from domestic shares, which hit record highs earlier in the day, but ended largely flat as investors booked profits. In the offshore non-deliverable forwards, the one- month contract was at 62.01/11 while the three-month was at 62.54/64.
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