Mumbai (PTI): The rupee recovered part of early losses and on Wednesday ended at 39.5450/5500 versus the US currency, cheaper by about 20 paise from previous close of 39.35/36 in anticipation of a large pull out by foreign funds.
In volatile trade at the Interbank Foreign Exchange (forex) market, the local currency tumbled to a low of 39.98 a dollar following an initial plunge on stock markets and later moved in a range of 39.98 and 39.5450 during the day.
The rupee was largely influenced by stock market activity and recovered from initial lows in line with a bounce in the benchmark Sensex, which ended with 336-point fall. The Sensex plunged by 1744 points within minutes of trading.
The market regulator Securities and Exchange Board of India (SEBI) yesterday released a paper proposing limits on FII inflows into equity.
SEBI's paper released yesterday has suggested Foreign Institutional Investors (FIIs) may not be allowed to issue or renew offshore derivative instruments and will be required to wind up existing participatory notes in 18 months.
The move is expected to result in massive withdrawals of funds by investors or hedge funds not registered with SEBI.
The record capital inflows has prompted a strong 12.5 per cent appreciation in the rupee against the greenback so far in the year. Indian unit had hit a high of 39.27 a dollar on October 11.
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