Published on Fri, Nov 27, 2009 at 12:05 | Source : Reuters
Updated at Mon, Nov 30, 2009 at 15:28
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Rupee falls to 3-wk low on Dubai debt worries
The rupee fell to a three-week low on Friday, as Dubai's debt problems hit Asian stocks and raised worries that risk aversion may push foreign investors to cut exposure to local equities.
The rupee fell to a three-week low on Friday, as Dubai's debt problems hit Asian stocks and raised worries that risk aversion may push foreign investors to cut exposure to local equities.
At 10:20 a.m. (0450 GMT), the partially convertible rupee was at 46.79/80 per dollar, of an early trough of 46.87, its weakest since Nov. 6 and about 0.7% lower than 46.44/45 at Thursday's close.
"Dubai's problems are clearly a new worry for the market. We expect more selling of rupees during the day, if stocks continue to fall," said a senior dealer with a foreign bank.
"Touching 47 to a dollar is possible if the rupee breaches the 46.90 level," a trader at a private bank said.
Dubai said on Wednesday it wanted creditors of state-owned Dubai World and its property subsidiary Nakheel, to agree to a debt standstill in a first step towards restructuring.
Dubai World, the conglomerate that spearheaded the emirate's breakneck growth, had some USD 59 billion in liabilities as of August.
India's benchmark stock index fell more than 2% early as the Dubai debt concerns triggered worries about the global financial system and rattled markets across Europe and Asia.
Foreign portfolio buying of about USD 15.3 billion of stocks this year has helped the rupee rise nearly 13% from a record low of 52.2 in early March.
One-month offshore non-deliverable forward rupee contracts were at 46.86/96, weaker than the onshore spot rate.
