The rupee plunged to a new record low of 68.75 per dollar in the late
morning trade on persistent dollar demand from banks and importers due
to further fall in equity market amid rise in crude oil prices
The rupee resumed lower at 66.90 per dollar, as against the Tuesday Aug 27,2013 closing
level of 66.24 per dollar at the forex market and dropped further to an
all-time low of 68.75 per dollar at 10.45 hrs (IST)
The rupee nosedived by 3.7% to an all-time low of 68.85 intra-day before closing at 68.80/81on Wednesday (recording its biggest single-day drop of 256 paise in 18 years on Wednesday, closing at a new historic low of 68.80)compared to its previous close of 66.24/25 on Tuesday
The rupee nosedived by 3.7% to an all-time low of 68.85 intra-day before closing at 68.80/81on Wednesday (recording its biggest single-day drop of 256 paise in 18 years on Wednesday, closing at a new historic low of 68.80)compared to its previous close of 66.24/25 on Tuesday
Forex dealers said besides strong month-end demand for the American
currency from importers, concerns related to subsidy burden after the
passage of Food Security Bill and capital outflows mainly weighed on the
domestic currency
The Rupee was more or less stable for much of the first half of 2013 and has depreciated
by 16 % or more vis-à-vis the dollar over the last two months
(see Chart)
The volume of trading in exchange-traded currency derivatives increased
from Rs. 2.6 billion in September 2008, when such trading was first
permitted, to Rs. 234.4 billion in June 2013, the RBI hints at a link
between this and exchange rate volatilityThe RBI which has been pointing fingers at the currency derivatives market as a speculative hub where the dollar rules higher, now argues that prices in those markets, or those driven by speculation, are beginning to influence spot dollar prices in terms of the rupee
The Reserve Bank recently banned proprietary trading by banks in the currency futures/exchange-traded currency options markets. Such trading is allowed only on behalf of clients
SEBI also tightened exposure norms for currency derivatives to check excessive speculation by increasing margin requirements and curtailing open positions on currency derivatives
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