Rupee hits over 1-1/2 month low; more losses in store
The rupee dropped for a second session on Friday, hiting its lowest level in over a month-and-half as stop-losses were triggered in the dollar after rumours of a possible downgrade by Fitch Ratings and the follow-on breach of a key techinical level.
The rupee's fall continued a day after India unveiled a surge in government spending despite expectations of an austerity budget to shore up its finances.
Fitch Ratings sovereign analyst Art Woo had told Reuters post-budget on Thursday that it would not impact India's sovereign ratings, though the country could find it challenging to meet its fiscal deficit target of 4.8 percent for the next fiscal year.
Traders, however, said there were rumors that Fitch was more than likely to downgrade India following Woo's interview to some local television channels earlier on Friday.
"The euro came down, there were some rumours regarding Fitch talking of an India downgrade -- these together led to triggering of several stops," said A. Ajith Kumar, a senior foreign exchange dealer at Federal Bank
The rupee's fall continued a day after India unveiled a surge in government spending despite expectations of an austerity budget to shore up its finances.
Fitch Ratings sovereign analyst Art Woo had told Reuters post-budget on Thursday that it would not impact India's sovereign ratings, though the country could find it challenging to meet its fiscal deficit target of 4.8 percent for the next fiscal year.
Traders, however, said there were rumors that Fitch was more than likely to downgrade India following Woo's interview to some local television channels earlier on Friday.
"The euro came down, there were some rumours regarding Fitch talking of an India downgrade -- these together led to triggering of several stops," said A. Ajith Kumar, a senior foreign exchange dealer at Federal Bank
The Economic Times
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