6.1.12

The Rupee has a torrid year

The rupee completed its first annual loss since 2008 as Europe’s debt crisis threatened to derail global economic growth and hurt demand for financial assets in developing nations. The currency weakened the most in Asia this year, touching a record low of 54.305 per dollar on December 15, as foreign funds cut holdings of Indian stocks by $380 million, exchange data show. The $1.7 trillion economy may miss the central bank’s growth estimate of 7.6% for the 12 months ending March 31, Governor Duvvuri Subbarao said December 22. Sovereign bonds completed a third annual decline on speculation the government will boost its debt-sale plan from a record. The rupee slid 15.8% in 2011 and 0.2% this week to 53.0650 per dollar in Mumbai, according to data compiled by Bloomberg. It was little changed on Friday. The currency may slide to 60 per dollar next year, CLSA Asia-Pacific Markets and Skandinaviska Enskilda Banken AB predicted this month. Rupee also underperformed those of the largest emerging markets this year. Brazil’s real lost 11% to 1.8657 per dollar and the Russian ruble fell 5.4% to 32.2669. The Chinese yuan appreciated 4.7% to 6.2940.Three-month offshore forwards were at 54.53 to the dollar, compared with 54.81 on Thursday. Non-deliverable contracts are settled in dollars. The BSE sensitive index of shares lost 25% in 2011.

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