The dwindling flows from foreign funds, the new cash system doing away the badla system at the BSE, incessant rains at Mumbai recorded low volumes and the rupee ended at 47.14/15 on Monday, poised for further fall if the situation continues.
The sentiment has become damp, it appears, with the doing away of the badla system and the wait and watch policy by big players in the market. Particularly the response by the foreign institutional investors is awaited in the face of the falling of the inflows from $112.1 million two weeks earlier to the current figure of $22.1 million. It would not be till some time for what direction the thinking of the FIIs would take would be clear and the full consequences of the post-badla scenario to be felt.
The market sources feel that the rupee is overvalued by 4% against the major trading currencies that it deals with, and a higher jobless estimates in USA also might have been responsible for the dollar to move in narrow limits against the rupee. However the IMF’s pat for USA might see the dollar rising, the market analysts feel.
The forwards market marked higher premiums for the dollar partly due to the fact that banks are not active in the buy-sell swaps on Monday. |
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