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Aug 20, 2013 at 08:19pm IST

Indian Rupee recovers marginally, goes below 64 vs US dollar; Sensex above 18,000 mark

Mumbai: 12:15 pm: Sensex and Nifty loses points at 18235.05 and 5391.45 respectively.

12:00 pm: Rupee still at 63.68 versus US dollar. Sensex at 18285.05 and Nifty above 5,400.

11:30 am: The rupee gains 20 paise at 63.68. Sensex recovers marginally at 18233.82 and Nifty at 5,394.95.

Rupee recovers marginally, goes below 64 vs US dollar; Sensex above 18,000 mark

The RBI's measures have raised fears of outright capital controls that would further undermine the confidence of foreign investors.

11:15 am: The rupee loses 10 paise and stood at 63.86 versus US dollar. Sensex is at 18177.41 and Nifty is at 5376.75.

10:35 am: The rupee at 63.70 versus US dollar. Sensex at 18134.98, Nifty at 5359.15.

The rupee fell to an all-time low of 64.15 versus US dollar on Tuesday. The rupee opened at 63.75 per dollar versus 63.13 in previous close.

The rupee is down nearly 5 per cent in the last six days.

Mohan Shenoi, Kotak Mahindra Bank said, "Rupee depreciation is largely a local phenomenon. Weak equity markets on concerns of decelerating growth is impacting the rupee. A depreciating rupee is making unwinding of tight liquidity difficult. Rupee is expected to depreciate further today and is likely to test 64/USD levels."

The euro rose to 1.337 per dollar on comments from the Bundesbank that the ECB's forward guidance on low interest rates was not unconditional. Gains capped by rising us yields. Dollar index was at 81.25.

The BSE Sensex opened 325.93 points down or 1.78 per cent at 17981.59, and the Nifty is at 5323.35, down 91.40 points. About 141 shares have advanced, 335 shares declined, and 28 shares are unchanged.

Far from propping up the currency, the measures from the Reserve Bank of India late on Wednesday to restrict how much its citizens and companies can invest abroad raised fears of outright capital controls that would further undermine the confidence of foreign investors.

Policymakers have cobbled together a slew of steps over the past month in a bid to halt the rupee's slide, including the RBI's extraordinary steps on July 15 to drain cash from the system and raise short-term interest rates in an economy already growing at a decade low.

Yet none of the steps unveiled so far have convinced investors that India can attract overseas investments, which is seen as essential in narrowing a record high current account deficit that is the biggest source of the rupee weakness.

The approach is beginning to test the patience of foreign investors, just when emerging markets such as India are already seen as particularly vulnerable ahead of the expected tapering of monetary stimulus by the US Federal Reserve.

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