By -
Jul 30, 2014
India’s rupee declined the most in
more than a week on speculation importers stepped up dollar
purchases to pay month-end bills.
The local currency weakened after the Bloomberg Dollar Spot Index, which tracks the greenback against 10 major peers, rose to an eight-week high yesterday. The Federal Reserve will scale back its monthly bond purchases to $25 billion from $35 billion at its two-day meeting ending today, according to economists surveyed by Bloomberg, keeping it on track to ending the program late this year.
“Month-end dollar demand from oil importers is impacting the rupee,” said Naveen Raghuvanshi, a Mumbai-based currency trader at DCB Bank Ltd. “The rupee also weakened on account of dollar strength ahead of the Fed policy review.”
The currency depreciated 0.1 percent to 60.1850 per dollar as of 9:46 a.m. in Mumbai, according to prices from local banks compiled by Bloomberg. That’s the biggest drop since July 18.
Three-month offshore non-deliverable forwards on the rupee fell 0.2 percent to 60.87 per dollar, according to data compiled by Bloomberg. Forwards are agreements to buy or sell assets at a set price and date.
One-month implied volatility, a measure of expected moves in the exchange rate used to price options, rose 19 basis points, or 0.19 percentage point, to 5.49 percent, according to data compiled by Bloomberg.
To contact the reporter on this story: Kartik Goyal in Mumbai at kgoyal@bloomberg.net
To contact the editors responsible for this story: James Regan at jregan19@bloomberg.net Anil Varma, Robin Ganguly
The local currency weakened after the Bloomberg Dollar Spot Index, which tracks the greenback against 10 major peers, rose to an eight-week high yesterday. The Federal Reserve will scale back its monthly bond purchases to $25 billion from $35 billion at its two-day meeting ending today, according to economists surveyed by Bloomberg, keeping it on track to ending the program late this year.
“Month-end dollar demand from oil importers is impacting the rupee,” said Naveen Raghuvanshi, a Mumbai-based currency trader at DCB Bank Ltd. “The rupee also weakened on account of dollar strength ahead of the Fed policy review.”
The currency depreciated 0.1 percent to 60.1850 per dollar as of 9:46 a.m. in Mumbai, according to prices from local banks compiled by Bloomberg. That’s the biggest drop since July 18.
Three-month offshore non-deliverable forwards on the rupee fell 0.2 percent to 60.87 per dollar, according to data compiled by Bloomberg. Forwards are agreements to buy or sell assets at a set price and date.
One-month implied volatility, a measure of expected moves in the exchange rate used to price options, rose 19 basis points, or 0.19 percentage point, to 5.49 percent, according to data compiled by Bloomberg.
To contact the reporter on this story: Kartik Goyal in Mumbai at kgoyal@bloomberg.net
To contact the editors responsible for this story: James Regan at jregan19@bloomberg.net Anil Varma, Robin Ganguly
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