Indian rupee marginally falls against dollar

MUMBAI The rupee fell marginally on Friday as global risk assets remained pressured, but the rupee still posted its first gain in four weeks after the new finance minister promised fiscal consolidation and steps to boost the economy.

The local currency remained buffeted in a range for most of the session with a weakening bias as the euro fell for a third successive session and global shares dipped after recent gains.

The partially convertible rupee closed at 55.28/29 per dollar as per the SBI closing rate versus its previous close of 55.27/28. It rose 0.85 per cent in the week, its first rise in four weeks.

Dealers said the market awaits the July headline inflation, due on Tuesday, to get a bearing on the Reserve Bank of India’s rate stance when it meets next in September.

Indian wholesale prices are expected to rise 7.37 per cent in July from a year earlier, compared to 7.25 per cent in June.

The rupee has been largely helped by a weakness in the global dollar with the euro rising to a one-month high earlier this week on hopes the European Central Bank will act to bring down borrowing costs of Italy and Spain.

“The market has been closely tracking the euro. If the euro/dollar falls below 1.22, we may see some weakness in the rupee,” said Naveen Raghuvanshi, associate vice-president at Development Credit Bank.

The weekly gains were also helped by comments from Finance Minister P Chidambaram, who sought to allay investor fears about the slowing economy and paralysis in decision making.

The one-month offshore non-deliverable forward contracts were at 55.55, while the three-month was at 56.21.

Source : omantribune.com