The rupee is set to weaken further on Monday following a likely strengthening of the dollar against other global currencies. Besides, a rising demand for the greenback from Indian companies to meet their import obligations is also set to weaken the Indian currency.
On Friday, the rupee closed at 44.64-65 to a dollar, down 0.66 per cent over the previous close of 44.35-36. During the day’s trade, it fell as low as 44.75, a level it last traded on December 21, 2006. The demand from importers, including oil marketing companies, and a slide in stock markets contributed to the rupee’s decline. The rupee may cross the 45 mark in the near term, a public sector bank executive said.
The Indian currency has slumped 11.8 per cent this year, with global investors making net equity sales of $7.1 billion.
The Indian rupee is expected to track the dollar’s movement against major currencies like euro and pound sterling overseas. If the dollar continues to strengthen against the major global units, banks are expected to buy dollars, leading to a further drop in the rupee.
G-sec: Buoyant mood
Government securities (G-sec) may have a strong opening this week because of low crude oil prices and an absence of any severe strain on liquidity could boost the sentiment. Currently, October crude oil futures were hovering near $107 a barrel on the New York Mercantile Exchange after closing at $107.89 on Thursday.