Indian Rupee Nears 3 Month LowNews | April 12, 2012 at 7:30 am
Fears about selling of foreign funds due to weak fundamentals in the stock market and a huge demand of dollars from oil companies pulled the rupee to trade at its 3 month low level on Tuesday; it ended at 51.48 to a dollar.
On Monday, RBI was also rumored to have intervened to support rupee but the end result was negative.
The latest government data reflects that India’s balance of payments entered in to a negative zone for the first time in 3 years with the current account deficit of $ 19.6 billion.
Importers are hit hard because of weak rupee as imports are costlier, while exporters are delighted as it makes their products and services cheaper in terms of dollars.
In India a weak rupee helps software and textile importers but at the same time capital goods companies and oil importers are hard hit due to dearer imports.
The Indian rupee is weak due to several factors like current account deficit, weak stock market, inflation, rising crude oil prices
Trade pundits are keeping a watch over the ratings review meetings between the analysts with global ratings major S & P and the officials at the ministry of finance.
According to trade analysts the situation may remain the same for few coming months.