Rupee falls for third week; closes at six-month low of 55.63 Vs dollar
In straight three-week of losing string, Rupee has slumped by 169 paise or 3.13 percent.
Mumbai: Although the Indian rupee came off from over its eitht-month intra-day low of below 56-mark, it closed down by 75 paise at six-month low of 55.63 on sluggish local equities amid sustained dollar demand from importers and some banks, extending losses for the third straight week.
Late weakness in dollar also weighed on the rupee while sustained capital inflows failed to stem the rupee fall.
At the Interbank Foreign Exchange (Forex) market, the local unit commenced the week lower at 55.06 a dollar from last weekend's close of 54.88 and immediately touched a high of 54.80.
Later, it continued to decline and touched a low of 56.01 before concluding the week at 55.63, showing a fall of 75 paise or 1.36 percent. In straight three-week of losing string, it has slumped by 169 paise or 3.13 percent.
The BSE Sensex closed week sharply lower by almost 582 points or 2.87 percent, snapping five-week of rising trend while FIIs pumped in over USD 1.0 billion in the first four days of the week, as per Sebi data.
On May 17, global agency Standard & Poor's threatened to downgrade India's rating to 'junk' status if it fails to pursue reforms, keeping the rupee under pressure.
"The fall in rupee was expected after S&P's warning to downgrade the Indian economy to junk status on Friday. Also a bearish stock market and weakening in euro and Japanese yen against the dollar also dampened the rupee sentiment today," said N S Venkatesh, Head (Treasury) at IDBI Bank.
Pramit Brahmbhatt, CEO, Alpari Financial Services (India) said,"Rupee continued to trade low consecutively for the third week against dollar mainly taking cues from local equities which traded weak this week. Steep decline in the dollar and weakness in global equities also weighed on the rupee.
"Dollar demand from gold and oil importers further weakened the Rupee and traded 8-1/2 month low this week, 1st time since Sept 2012; it depreciated over one pct this week. The trading range for the same is expected to be within 55.35 to 55.85 for Monday.
"Recommended to be cautious and Buy USD/INR (Spot) on dips with the appropriate stop loss as Rupee at this stage is expected to depreciate against strong dollar. Pivot Point for the Pair is at 55.50 and below is the Support and Resistance levels," he added.
The premium for the forward dollar remained weak on persistent receipts by exporters.
The benchmark six-month forward dollar premium payable in October finished sharply lower at 146-1/2-148 paise from last weekend's level of 157-1/2-159-1/2 paise.
Far-forward contracts maturing in April also tumbled to 305-307 paise from 319-1/2-321-1/2 paise previous weekend.
The RBI fixed the reference rate for the US dollar at 55.6075 and for the euro at 71.9415 as against the preceding weekend's level of 54.8865 and 70.5785 respectively.
The rupee fell back against the pound sterling to 84.10 from previous weekend's level of 83.68 and also turned sharply negative to settle at 72.14 per euro from 70.65.
It also remained negative to close against the Japanese yen at 54.90 per 100 yen from 53.56 last weekend.