Rupee touches 57-mark intra-day; settles at 56.84 against dollar
Mumbai: The rupee Thursday touched one-year low level of 57 before closing at 56.84, still down by 11 paise, due to sustained dollar demand from importers and some banks amid volatile stock markets.
Dollar selling by exporters and some banks towards end of trade helped rupee recover from psychological low levels to close at 56.84, a fresh 11-month level, dealers said.
A weak dollar overseas amid capital inflows also capped the rupee fall to some extent, they said.
"Heavy dollar demand and weakness in domestic equity markets added pressure on the rupee. We continue to hold a bearish outlook on the rupee and see it breaching the all time low of 57.33 levels very soon," said Abhishek Goenka, Founder and CEO, India Forex Advisors.
At the Interbank Foreign Exchange market, the rupee resumed lower at 56.80 a dollar from previous close of 56.73 and immediately touched a low of 57.00, level not seen since June 28, 2012 when it had touched an intra-day low of 57.10.
Later, the rupee recovered some ground on dollar selling by exporters to a high of 56.7850 before concluding at 56.84, still showing a fall of 11 paise or 0.19 percent.
Yesterday, it has plunged by 29 paise or 0.51 percent.
The BSE benchmark Sensex today declined by 48.73 points or 0.25 percent while FIIs infused 88.49 crore yesterday, as per provisional data with stock exchanges.
The dollar index was down by 0.22 percent against a basket of six major currencies.
"The dollar index traded weak which restricted the rupee fall. The RBI may decide against cutting interest rates this month which will help the rupee to find its direction," Pramit Brahmbhatt of Alpari financial Services (India) said.
"Rupee has depreciated 5.2 percent since the start of May till yesterday and has become the worst performer in Asia over this period. The trading range for the spot USD/INR pair is expected to be within 56.70 to 57.20," he added.
Meanwhile, premium for forward dollar fell back on fresh receipts by exporters.
Benchmark six-month forward dollar premium payable in November declined to 157-158-1/2 paise from Wednesday's close of 159-1/2-161-1/2 paise.
Far-forward contracts maturing in May also dropped to 312-314 paise from 316-1/2-318-1/2 paise.
"Any improvement in global sentiment is not seen reflected on rupee from the last couple of days. This could be on the back of huge buying pressure in the local market. The huge external debt and corporate liabilities along with overall importers demand is the main culprit behind rupee weakness," Goenka said.
The RBI fixed the reference rate for the US dollar at 56.8690 and for the euro at 74.5155.
The rupee dipped further against pound sterling to 87.77 from last close of 87.12 and also remained negative against the euro to end at 74.54 from 74.11.
It too moved down further against the Japanese yen to 57.39 per 100 yen from 57.07.