Rupee down 23 paise against dollar
Falling for the first time in three days, the rupee Tuesday lost 23 paise to end at 54.09 due to month-end dollar demand and a steep fall in local equities.
Mumbai: Falling for the first time in three days, the rupee Tuesday lost 23 paise to end at 54.09 due to month-end dollar demand and a steep fall in local equities.
The local currency commenced lower at 54.03 a dollar yesterday's close of 53.86 at the Interbank Foreign Exchange (Forex) market.
Later, it moved in a tight range of 54.00-54.22 before ending at 54.09, a fall of 23 paise, or 0.43 percent. In the last two sessions, it had gained 87 paise, or 1.60 percent.
Forex dealers said, however, some capital inflows and weak dollar overseas cushioned rupee's fall to some extent.
"The rupee today completely followed the local equity markets' trend. Fears over the Italian election results which might hit the euro-zone crisis also affected the trading sentiment here," said Ashtosh Raina, chief dealer at HDFC Bank.
He added that forex market is expecting some positives on containing the fiscal deficit and borrowing side, which might boost the rupee sentiment. "Rupee will move in the 53-55 range this week," Raina said.
The BSE benchmark Sensex today nose-dived by 317 points, or 1.64 percent, to 19,015.14 due to hike of up to five percent in freight charges by Railway Minister Pawan Kumar Bansal in Rail Budget.
Foreign institutional investors bought local equities worth nearly USD 14 million (Rs 74.68 crore), according to the BSE provisional data.
Pramit Brahmbhatt, CEO, Alpari Financial Services (India) said, "Rupee ended the day on a weaker note. The rupee lacked clarity from most parts of the day today, hovering in a band 22 paise. No clear cues were seen ahead of the crucial Budget to be unveiled on February 28."
"The rupee was under pressure today... The Rail Budget disappointed the markets as the government proposed a hike of 5 pct in the freight rate. This pressurised the Indian stock markets and the rupee," said Abhishek Goenka, Founder and CEO, India Forex Advisors.
The premium for the forward dollar declined further on persistent receipts by exporters.
The benchmark six-month forward dollar premium payable in July settled weak at 167-169 paise from 169-1/2-171/1-2 paise.
Far-forward contracts maturing in January also finished down at 330-332 from 335-337 paise.
The RBI fixed the reference rate for the US dollar at 54.0645 and for euro at 70.6105.
The rupee fell back against the pound sterling to 81.86 from Monday's close of 81.58 and also turned sharply negative against the Japanese yen to end at 58.83 from 57.44.
It, however, bounced back against the euro to 70.73 from last close of 71.47.