Rupee falls for third week; closes at 55.06 Vs dollar
The Indian rupee continued its downslide for the third week in a row as it tumbled by 58 paise to close at a three-week low of 55.06 against the Greenback.
Mumbai: The Indian rupee continued its downslide for the third week in a row as it tumbled by 58 paise to close at a three-week low of 55.06 against the Greenback following sluggish local equities amid sustained dollar demand from importers.
However, sustained capital inflows made a feeble attempt to restrict the rupee fall.
At the Interbank Foreign Exchange (Forex) market, the domestic unit resumed the week better at 54.41 a dollar from last weekend's close of 54.48 and immediately touched a high of 54.40.
Later, it continued to decline and logged a low of 55.30 before concluding the week at 55.06, showing a fall of 58 paise or 1.06 pc. In three weeks of losing string, it has plunged by 80 paise or 1.47 percent.
The Indian benchmark sensex closed the week down by 75.25 points or 0.39 percent while Foreign Institutional Investors (FIIs) pumped in USD 817.29 million in the first four days of the week.
Experts said government lowering the growth projection for the current financial year to 5.7-5.9 percent from 7.6 percent estimated earlier dampened the rupee sentiment.
On Tuesday, the RBI kept short-term lending (repo) rates and cash reserve ratio (CRR) unchanged in the mid-quarter policy review, hinting easing of rates in the next meeting scheduled on January 29, 2013.
The rupee attempted a recovery at mid-week on hopes of more capital coming into the banking system after Parliament passed the crucial Banking Bill.
"Persistent demand from importers, mainly oil refiners, to meet their month-end needs and also year-end dollar buying weighed on the rupee and will further put pressure on the rupee and could drift it towards 55.00 levels once again," said Abhishek Goenka, Founder and CEO, India Forex Advisors.
"The weakness in rupee was mainly on account of recovery in the dollar index, euro falling below USD 1.3200 levels and uncertainties over US fiscal cliff." he added.
The RBI fixed the reference rate for US dollar and euro at Rs 55.0860 and Rs 72.7730 from Rs 54.3880 and Rs 71.2920, respectively, in the last weekend.
The rupee premium for the forward dollar dropped further on sustained receivings by exporters.
The rupee premium for the benchmark six-month forward dollar payable in May declined further at 157-1/2-159-1/2 paise from last weekend's level of 164-165 paise and far-forward contracts maturing in November also remained weak at 301-303 paise as against 309-1/2-311-1/2 paise.
The rupee dropped further sharply against Pound Sterling to end the week at 89.44 from previous weekend's close of 87.82 and also tumbled against the euro to finish at 72.71 from last weekend's level of 71.35.
However, it reacted downwards against the Japanse yen to close at 65.42 per 100 yen from 65.04 last weekend.