Rupee down 18 paise at 54.14 on strong dollar demand from importers
Mumbai: The rupee on Monday fell by 18 paise to 54.14 against the dollar on fresh demand for the US currency from crude and gold importers, amid firm global cues.
However, capital inflows and strong domestic equities limited the local currency's fall to some extent, forex dealers said.
The rupee commenced stable at its last closing level of 53.96 at the Interbank Foreign Exchange (Forex) market.
It moved in a range of 53.92-54.24, before settling at 54.14 against the dollar, a fall of 18 paise, or 0.33 percent from its previous close.
"After gold prices fell last week, there is heavy demand for the precious metal from importers, which in turn is putting pressure on rupee," a treasurer with a private bank said, adding that month-end dollar demand from importers, mainly oil refiners, also weighed on the local currency.
Gold prices plunged to a 21-month low at Rs 26,440 per 10 grams on April 16 tracking weak global cues that triggered a surge in retail jewellery demand across the country.
"Strong dollar index weighed on the rupee...There was a technical buying happening in the market," said Abhishek Goenka, Founder and CEO, India Forex Advisors.
Foreign institutional investors today pumped in USD 169.16 million (Rs 915.82 crore) into local equities, as per BSE provisional data.
The BSE benchmark Sensex rose by 153.37 points to 19,169.83.
The dollar index was up by 0.05 percent against a basket of six major global currencies.
Pramit Brahmbhatt, CEO, Alpari Financial Services (India) said: "Rupee depreciated today although the fall was capped by rise in the Indian shares, which closed up by almost one percent. The dollar index, which tracks the performance of the greenback versus a basket of six other major currencies is trading positively after a two day fall."
Meanwhile, the premium for the forward dollar remained weak on continued receipts by exporters.
The benchmark six-month forward dollar premium payable in September slipped to 160-161-1/2 paise from previous close of 163-1/2-165-1/2 paise and far-forward contracts maturing in March also dropped to 324-325-1/2 paise from 329-1/1-331-1/2 paise.
The RBI fixed the reference rate for the US dollar at 54.1665 and for the euro at 70.7045.
The rupee softened against the pound sterling to 82.43 from last Thursday's close of 82.38 and also declined against the euro to 70.60 from 70.48.
It, however, improved further against the Japanese yen to 54.31 per 100 yen from previous close of 54.85.