Market had built up a huge short position on the rupee, expecting it to fall after a stellar run
Stocks enjoyed their record breaking streak for the third straight session
Long periods of a 'strong' currency has not been good for growth and development of nations
Post a short-term correction, the rupee could see long-term gains if dollar index falls
Domestic unit has been moving in the 64-64.70 range in the past few weeks
This is the biggest one-day fall for the home currency since April 10
Experts say the rupee movement is largely due to continuous, large foreign flows into local assets
It was further supported by unwinding of long-dollar positions by speculators
Domestic currency largely moved in a narrow range throughout the day
---Pointer table sent with this is not needed; drop----With the rupee expected to continue strengthening in the short term, a demand for further tariff support to select sectors has risen."The worst is still to come. With the currency appreciating at a fast clip, while those of major competitors steadily go down, competitiveness of Indian goods will go down," says Ajay Sahai, director-general of the Federation of Indian Export Organisations.Major exporting sectors such as engineering products, readymade goods and automobiles are expected to come under the pressure of reduced earnings and potential drops in orders. It doesn't help that these major foreign exchange earners are also price-sensitive. They need to be given support, Sahai argues.However, with the Merchandise Exports from India Scheme covering nearly 8,000 product categories, chances of further support are slim. Under this scheme, the government provides duty benefits to exporters at two per cent, three per cent and five ...
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This is the biggest single-day fall for the rupee in three months
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Robust foreign portfolio investment inflows give the rupee strong underlying support
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