29 May 2013 10:23 [Source: ICIS news]
SINGAPORE (ICIS)--The Indian rupee (Rs) touched a ten-month low against the US dollar on Wednesday, fuelling further uncertainty among petrochemicals importers in the domestic market.
The partially convertible rupee was trading at 56.22/23 per US dollar as of 11:24 hours India standard time (06:24 GMT) on Wednesday, its lowest level since 25 July last year, reported Reuters.
The rupee closed at 55.9550/9650 against the US dollar on 28 May, according to Reuters.
The rupee has depreciated sharply in April amid a global rally in the dollar and worries about India's current account deficit, with lingering concerns about the eurozone debt crisis also weighing on the currency.
Indian imports of linear alkylbenzene (LAB), an intermediate used in the production of detergents, have slowed because of the sharp depreciation in the value of the rupee, suppliers and buyers said.
“We have stopped importing LAB because it is cheaper to buy cargoes in the local market,” an LAB buyer said.
However, domestic prices of LAB were expected to rise in June to compensate for the depreciation, according to buyers.
Prices of LAB imports into India were assessed at $1,800-1,820/tonne (€1,404-1,420/tonne) CFR (cost & freight) India in the week ended 15 May, according to ICIS pricing.
However, cargoes were available in the domestic market, inclusive of discounts, at Rs114-115/kg ($2.03-2.05/kg) DEL (delivered), which would be less than $1,800/tonne CFR India on an import parity basis, buyers said.
They said they are looking at buying domestically, because local material is relatively cheaper than imports and is delivered more promptly.
A recent move by the Indian government to raise import duties from 5% to 7.5% is also fuelling the demand for local goods.
With additional reporting by Prema Viswanathan and Muhamad Fadhil
($1 = €0.78, $1 = Rs56.1)
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