Indian rupee slumped by 6 paise at 59.82 a dollar at early trade on Monday, against closing value of 59.76 per dollar on Friday at Interbank Foreign Exchange Market due to demand for dollars from oil exporters.
Moreover at 10.30 am, the rupee weakened at 59.990 a dollar with 0.36 percent change. While Japanese Yen, Hongkong dollar, Singapore dollar, Taiwan dollar and Thai Baht inclined, remaining seven currencies among INR recorded a decline amid the list of 13 Asia-Pacific currencies. But, Australian dollar recorded no change at 0.9402 (AUS-USD).
"As long as the Iraq crisis continues, this should be the trend for the time being. And, if RBI doesn't intervene, and the Iraq crisis continues, it will definitely remain below 60 to the dollar," Reuters quoted Ashtosh Raina, head of forex trading at HDFC Bank. He referred to the price of Brent crude oil, which jumped to $113 per barrel on Friday, recording nine-month high since September.
The Central bank has not yet released the reference rate of Dollar and Euros for Monday. But, at reverse repo auction today morning, RBI purchased and sold 57 securities for ₹218.10 billion at 8 percent rate. It is apparent that the Central bank is endeavouring to curb inflation and fiscal deficit through purchase of dollars and other currencies.
Meanwhile, BSE Sensex declined by 99.65 points at 25,129.80 points and Nifty too depreciated by 36.20 points at 7,505 points. Indian Shares started trading on Monday, after recording the largest one day decline in four and half months on Friday. Top gainers from BSE were TCS, Bajaj Auto, Infosys, GAIL and ITC, while top losers were Larsen, Tata Power, Tata Steel, Tata Motors and Axis Bank.
Investors will be watchful on Federal Bank's steps this week regarding hike in interest rates, which will be declared after policy meeting on Wednesday. Asian stock price is expected to rise after Federal meeting.