Indian rupee steady after cbank raises interest rate
June, 12th 2008
The Indian rupee was steady in midday trade on Thursday, after the central bank raised a key lending rate by 25 basis points late on Wednesday, but dealers said the gains may be short-lived due to a spike in oil prices and a weak stock market.
* At 1 p.m., the partially convertible rupee <INR=IN> was at 42.825/835 per dollar, compared with Wednesday's close of 42.86/87. It had hit a 13-month low of 43.21 on May 22.
* Oil CLc1, India's biggest import, was trading close to $135 a barrel, close to the record $139 hit last week. India imports 70 percent of its oil needs and refiners are the biggest buyers of dollars in the local currency markets.
* India's main share index .BSESN was down 1.4 percent after having fallen nearly 3 percent in early trade. Foreign fund outflows have been weakening a key support for the rupee.
* Foreigners have been net sellers of $5.3 billion worth stocks so far in 2008, pulling the rupee down 8 percent. The rupee rose more than 12 percent in 2007, when foreign funds infused $17.4 billion into a record breaking stock market. (Reporting by Swati Bhat; Editing by Harish Nambiar)