Rupee falls to 59.85/$ in early trade

The rupee is Asia's worst performing currency since May 1

June 21, 2013 10:32 IST | India Infoline News Service
The rupee opened at Rs. 59.85 as against dollar in the early trade today compared to Rs. 59.67 yesterday.

The rupee closed at Rs 58.71 as against dollar yesterday.

On Thursday morning, the rupee hit an all-time low of 59.9275 as against a dollar post statements from the Federal Reserve. The rupee declined 1.6% in the start of trade.

Indian rupee has dropped 5.5% this year at par with Korea, Turkey and Brazil and much less than South Africa.

The rupee is Asia's worst performing currency since May 1.

The rupee has fallen almost 10% since the start of the year falling 5.35% in June alone.

Among the major causes for fall in rupee are high current deficit particularly in the month of May when trade deficit has risen considerably. This is because of high gold imports in the month of April and May.

The fall in rupee will adversely impact capital-intensive sectors and firms with foreign borrowings and those who import raw materials heavily.

Automobiles, capital goods, petroleum, power and telecom companies will bear the heat of a weak rupee.

But, most pharma companies in the sector will gain from the rupee's fall, since a substantial proportion of their revenues comes from exports. A strong US dollar and yen will boost net sales and operating margins.

The major gainers will be Dr Reddy's Lab, Sun Pharma, Lupin, Glenmark, Wockhardt and Cadilla Healthcare as they derive significant earnings from overseas markets.

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