Rupee at all-time low at 51.80/$; Citi sees 54/$ ahead

India’s rupee slid to a record low as mounting global stock losses added to concern investors will pull money out of riskier emerging-market assets. The currency extended a two-week slump on speculation Standard & Poor’s will soon cut the nation’s debt rating to junk. The rupee also fell on concern the current-account deficit will widen from a record as exports decline amid a deepening global economic slump.

The MSCI Asia Pacific Index dropped 3 percent after the U.S. Standard & Poor’s 500 Index lost 11 percent last month.“There’s a lot of pressure on the rupee as portfolio investments are falling amid the worsening global equity prospects,” said Sanjay Arya, Mumbai-based treasurer at state- owned Bank of Maharashtra. “A rating downgrade by S&P is feared. In addition, the outlook for exports looks quite bleak.”

The rupee slid 1.3 percent to an all-time low of 51.81 per dollar as of 9:55 a.m. in Mumbai, according to data compiled by Bloomberg.Offshore contracts indicate traders bet the rupee will trade at 52.00 to the dollar in a month, compared with expectations for a rate of 51.44 on Feb. 27. Forwards are agreements in which assets are bought and sold at current prices for future delivery.

Non-deliverable contracts are settled in dollars rather than the local currency.Dumping EquitiesFunds based abroad sold $1.65 billion more Indian equities than they bought this year, adding to 2008’s record $13.3 billion in net sales, according to data released by the Securities and Exchange Board of India. The Bombay Stock Exchange’s Sensitive Index has dropped 7.8 percent this year, following a record 52 percent slide in 2008.

S&P last week lowered its outlook on India’s credit rating to negative from stable, saying government spending plans to shield the economy from the global recession and win voter support in elections were “not sustainable.” The company rates India’s debt BBB-, the lowest investment grade.Asia’s third-biggest economy expanded 5.3 percent last quarter from a year earlier, the slowest pace in five years, a government report showed on Feb. 27.

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Rupee hits record low of 50.69 against US dollar

• The Indian rupee on Friday depreciated to an all-time low of 50.69 against the US currency in early trade on continued capital outflow by foreign funds and increased dollar demand from importers.
• At the Interbank Foreign Exchange (Forex) market, the domestic currency was quoted at 50.69 against the dollar, down 23 paise from its previous day's close.
• The rupee yesterday depreciated by 52 paise to 49.46/47 against the greenback.
• Dealers said concerns of capital outflows by funds and increased demand for dollar from importers caused the rupee to weaken.
• They added, the dollar's gains against other major currencies also weighed on the domestic currency.

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Rupee falls by 21 paise against USD to 49.03

The Indian rupee extended yesterday's weakness and depreciated by another 21 paise against the greenback in early trade today on fears of more capital outflows from the domestic bourses after Asian equity markets retreated.

At the Interbank Foreign Exchange (Forex) market, the domestic currency quoted weaker at 49.03 against the US currency, a fall of 21 paise over the previous close of 48.82/83 a dollar.The domestic currency has yesterday ended 15 paise lower at 48.82/83 against the dollar.

Dealers said concerns of capital outflows by funds on fears that domestic stock markets may open in the negative zone, in tandem with other Asian bourses, mainly put pressure on the Indian rupee.They said dollar's strength against other rival currencies also had some impact on the domestic currency.

Meanwhile, Hong Kong's Hang Seng index fell 3.01 per cent, Japan's Nikkei shed 1.5 per cent and Singapore's Strait Times dropped 1.29 per cent in early trade today.

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Rupee drops to 3-week low

The Indian rupee extended losses in afternoon trade on Tuesday dropping to three-week lows as banks bought the U.S. unit to arbitrage in the offshore non-deliverable forwards, while lower stocks also weighed.

• At 12:55 p.m., the partially convertible rupee was at 49.29/30 per dollar, its lowest since Jan. 23 and weaker than Monday's close of 48.84/85.
• One-month non-deliverable forward contracts PNDF were quoting at 49.52/62 per dollar, weaker than the onshore spot rate, providing a good arbitrage opportunity to banks.
• Indian shares fell more than 2.5 percent on Tuesday, with banks among major losers after a higher-than-expected government borrowing plan was seen as denting their outlook in the near term. See [.BO].
• A stronger dollar overseas also dampened sentiment for the rupee.

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