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Indian rupee slips to one-month low

MUMBAI — The Indian rupee yesterday fell to its lowest close in a month on concerns that a sixth straight fall in the stock market and rising global risk aversion would see foreigners cut their holdings of local equities.

The possibility of further steps by authorities to tighten capital inflows also weighed, after the Mint newspaper reported new measures were imminent, citing anonymous government sources.

The partially convertible rupee ended at 39.53/54 per dollar, slipping from than the previous finish of 39.390/395, its lowest close since October 24. It had hit 39.16 earlier this month, its highest since March 1998.

"There was some strong offshore demand for dollars today, and with the US holiday there isn't much of an inflow expected tomorrow," said a senior dealer with foreign bank. US markets were closed yesterday for the Thanksgiving holiday.

"Also, with the central bank providing a downside floor for dollar-rupee, traders are happier to push the pair up," the dealer added, referring to the Reserve Bank of India's (RBI) recent efforts to block the rupee from rising past 39.30.

RBI Deputy Governor Rakesh Mohan reiterated yesterday that the central bank actively intervened in the market, which also hurt sentiment. Foreign funds have been a key support for the rupee, which has gained about 12 per cent this year, but the massive inflows have created policy challenges for authorities.