Rupee to weaken as oil up, Asian stocks downRupee is likely to weaken due to rise in oil prices and lower Asian stock.
01 Sep 2008
Due to rise in oil prices and lower Asian stock market, the rupee is likely to weaken. A quarter of US crude production was closed due to Hurricane Gustav. As a result, the oil price rose to $116 a barrel. On the other hand, Asian stocks were hurt by the technology sector.
The biggest buyers of dollars are domestic refiners and
increase in prices could push up the demand for dollars. Around 70 percent oil
is imported. The Nikkei fell 1.4 percent, while Seoul shares were down 3 per cent and the
Hang Seng index fell 1.7 per cent.
The rupee has weakened by more than 10 percent due to the outflows from stocks of more than $7 billion so far in 2008. On Aug 29, the partially convertible ended at 43.935/945 per dollar, 0.35 percent weaker than its previous close of 43.78/79. Earlier in this week rupee had reached a 17 month low of 44.26.