Mumbai: The rupee washed out almost all of its last week's gain, depreciating by 25 paise to close at 53.81 against the Greenback during the week under review on fresh dollar demand from importers and some banks.
The market was mostly disappointed over the RBI's second quarterly monetary policy review which took the rupee to six-week low at 54.23.
The Reserve Bank of India (RBI) in its review of second quarterly monetary policy meeting on October 30 kept the key lending and borrowing rates unchanged while cut the cash reserve ratio (CRR) by 25 bps to pumped in nearly Rs 17,500 crore in the financial system.
Market participants had anticipated the cut in key rates which was not full filled by the apex bank.
However, it later recovered to a high of 53.60 on selling by exporters and some banks amid weakness in dollar in the mid-week, before concluding the week at 53.81, still showing a fall of 25 paise or 0.47 percent. In last week, it had hardened by 28 paise or 0.52 percent.
The BSE benchmark Sensex closed the week higher by over 130 points or 0.70 percent, which capped the rupee fall to certain extent.
Alpari Financial Services (India) Pramit Brahmbhatt CEO said, "The INR after a weak start continued to regain the lost grounds in rest of the week but pared some gains again on the last day of the week to close just above the open levels.
"The much hyped RBI Credit Policy decision disappointed the domestic markets as the RBI's pessimistic view on Indian economy postponed its repo rate cut decision and went ahead with a token cut of 25bps in CRR. The RBI lowered the growth forecast for FY13 to 5.8 percent and elevated the Inflation expectations to 7.8 percent which pushed the INR to over five week low."
"The demand from oil and gold importers due to the upcoming festive season along with corporate demand continue to weigh on INR which eased to over a month's low," he added.
RBI fixed the reference rate for US dollar and euro at Rs 53.6645 and Rs 69.2425 from Rs 53.6300 and Rs 69.7455 last weekend, respectively.
The benchmark six-month forward dollar payable in April settled at 166-168 paise and far-forward contract maturing in October ended at 304-1/2-305-1/2 paise.
The rupee remained weak against Pound Sterling to end the week at 86.58 from preceding weekend's level of 86.44 while fell back against the Japanese yen to 67.07 per 100 yen from 66.85.
However, it firmed up further against the euro to close at 69.31 from previous weekend's level of 69.63.
First Published: Saturday, November 3, 2012, 16:15