Indian rupee hits 6-month low

India's rupee slid to a near six-month low against the dollar on Monday, prompting the central bank to intervene to prop up the struggling currency, traders said.

The Indian unit fell to an intraday low of 53.74 rupees to the dollar -- a level last seen in December -- but then recovered marginally to 52.89.

"The rupee is in a challenging environment, the headwinds are too strong. It is unlikely to appreciate in a hurry," said Sonam Udasi, head of research at IDBI Capital.

The partially convertible currency has been hurt by global uncertainty, weak domestic economic data, slowing overseas funds inflows and pressure from oil importers who have to exchange rupees for dollars when they purchase crude.

Energy-hungry India imports four-fifths of its crude oil needs to fuel its economy.

"The RBI (Reserve Bank of India) likely intervened" to lift the currency of its intraday lows, a dealer with a Mumbai-based brokerage said, declining to be named.

The RBI typically intervenes -- by buying rupees -- to prevent volatility and has a policy of not commenting on movements of the forex market.

Traders said it was the eleventh time in 2012 that the central bank is believed to have stepped into the market to prop up the rupee.

The currency was also boosted by news that India's government had deferred by a year plans for a proposal which aims to crack down on tax evasion, which had caused concern among foreign investors.

The "general anti-avoidance rule", or GAAR, was intended to stop foreign companies evading capital gains tax by routing investments through popular tax havens such as Mauritius.

The Indian unit, Asia's worst performing currency in 2011, hit a record low of 54.30 against the dollar in mid-December and then rebounded to 48.67 rupees in February, led by strong foreign fund buying of Indian assets.

Editor’s note:Yahoo Philippines encourages responsible comments that add dimension to the discussion. No bashing or hate speech, please. You can express your opinion without slamming others or making derogatory remarks.

  • Chronicling the komedya in Antique VERA Files - The Inbox
    Chronicling the komedya in Antique

    By Alex C. Delos Santos, VERA Files The first time Cecile Locsin-Nava, a scholar on cultural studies in Western Visayas, came to Antique around ten years ago was to gather data for a research on the korido, or Philippine narrative … Continue reading → …

  • Ayungin dilemma Ramon Casiple - Parallaxis
    Ayungin dilemma

    China faces a dilemma in Ayungin Shoal and other contested areas. If it waits for the ITLOS—which may decide against it—it would have tacitly bound itself to UNCLOS and risk a rogue state reputation if it asserts its claim in the South China Sea. If its militarily acts now, it may face international isolation. …

  • 48 nabbed in biggest anti-trafficking catch in Bongao VERA Files - The Inbox
    48 nabbed in biggest anti-trafficking catch in Bongao

    By Jake Soriano, VERA Files Bongao, Tawi-tawi—A team of Marines and policemen intercepted around noon Thursday 48 people, 12 of them minors, believed recruited by a human trafficking syndicate for work in Malaysia. The arrest constitutes what advocates called the … Continue reading → …

POLL
Loading...
Poll Choice Options