Mumbai: The Indian rupee snapped its two-week gaining streak and slipped by 21 paise to close at 59.93 against the greenback following steep fall in local equities amid fresh dollar demand from importers.
Domestic shares crashed like nine pins after the declaration of Railway and Union Budget during this week as according to market participants both the budget was in line with market expectations and were already factored in.
The benchmark BSE Sensex plunged by 937.71 points, or 3.61 percent this week, showing a steep weekly fall in absolute term in last five years.
The dollar demand was so strong that better USD overseas and sustained capital inflows could not able to stem the rupee fall, a forex dealer said.
At the Interbank Foreign Exchange (Forex) market, the local unit commenced lower at 59.80 a dollar from last weekend's close of 59.72 and moved in a wide range of 59.57 and 60.31 before settling the week at 59.93, revealing a fall of 21 paise or 0.35 percent.
In last two-week it had risen by 46 paise or 0.76 percent.
"After appreciating for last two weeks, Rupee depreciated during the week. This week was eventful for the Indian markets as most eagerly awaited Rail budget and Finance budget were announced. Rail budget declared was more futuristic and overlooked the current scenario which disappointed the market and it reacted instantly to the unsatisfactory budget. Indices slipped down which further dented the Rupee movement. The trading range for the Spot USD/INR pair is expected to be within 59.50 to 60.50.
Forward dollar premiums dropped further on consistent receipts by exporters.
The benchmark six-month forward dollar premium payable in December dipped to 233.5-235.5 paise from 251.5-253.5 paise last weekend and far-forward contracts maturing in June 2015 also tumbled to 472-474 paise from 498.5-501.5 paise.
The RBI fixed the reference rate for the USD at 60.1855 and the euro at 81.8720 from 59.7939 and 81.3203 previously.
The rupee declined further against the pound Sterling to end the week at 102.65 from 102.35 preceding weekend, while reacted downwards against the euro to 81.55 from 81.18.
It fell back sharply against the Japanese yen to 59.20 per 100 yen from 58.52.
First Published: Saturday, July 12, 2014, 17:46