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Indian rupee falls to two-month low of 63.24 against US dollar

The domestic currency fell 77 paise from its previous close of 62.47 as government data showed trade deficit widened in October as against September. A strong US dollar overseas, after encouraging US jobs data renewed fears of stimulus tapering, added to the pressure on the rupee.

twitter-logoPTI | November 11, 2013 | Updated 19:11 IST
Rupee falls to two-month low of 63.24 against US dollar
Photo: PTI

The Indian rupee tumbled 77 paise to an almost two-month low of 63.24 against the US dollar as the trade deficit widened from a month ago and the US currency strengthened after encouraging jobs data renewed fears of stimulus tapering.

Sustained capital inflows could not stem the rupee's decline, a forex dealer said. It fell for the fourth straight day to end at the lowest level since 63.38 on September 18.

At the Interbank Foreign Exchange Market, the rupee opened lower at 63 a dollar from the previous close of 62.47 and recovered to a high of 62.93. However, it dropped to a low of 63.44 amid heavy dollar demand from importers, mainly oil refiners, and weak equities.

The rupee closed at 63.24, a fall of 77 paise or 1.23 per cent. In four sessions, it has slumped 162 paise.

"Friday's upbeat NFP (non-farm payrolls) report from the US...led to further strength in the US dollar, thereby making the rupee to depreciate against the dollar," said Abhishek Goenka, CEO of India Forex Advisors.

Meanwhile, the BSE Sensex dropped 175.19 points. Overseas investors bought a net Rs 412.03 crore of shares on Friday, according to provisional data with the stock exchanges.

"Shares fell for a fifth consecutive day to trade near a one-month low after better-than-expected US jobs data revived concerns the Federal Reserve would start tapering its monetary stimulus as early as this year. Taking cues from this, the rupee depreciated," said Pramit Brahmbhatt, CEO of Alpari Financial Services (India).

India's gold and silver imports increased to $1.3 billion in October from $0.8 billion in September even as exports grew at the fastest rate since September 2011. The trade deficit widened to $10.5 billion from $6.76 billion in September.

"Overall, global demand is improving, but higher imports (of oil, gold and others) have led to the deterioration in the trade deficit. The rise in imports is due to seasonality, as imports tend to rise ahead of the festival season," Sonal Varma of Nomura said.

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