Rupee down 15 paise at 65.88 Vs USD

Mumbai: Falling for the second consecutive day, the rupee on Tuesday lost another 15 paise against the US dollar to close at 65.88 on sustained demand for the American currency from banks and importers amid massive fall in domestic equities.

The markets benchmark BSE Sensex today plunged by over 541 points to settle below the 26,000-mark on heavy sell-off after ADB lowered India's growth forecast amid steep losses in Europe and lingering growth concern.

The domestic currency resumed slightly higher at 65.67 per dollar as against the overnight level of 65.73 at the Interbank Foreign Exchange market.

It hovered in a range of 65.95 to 65.55 per dollar during the day before concluding at 65.88, showing a loss of 15 paise or 0.23 percent.

It has lost 21 paise or 0.32 percent in two days.

"Some overnight comments from Fed officials have kept the hopes of a Fed hike later this year alive, and reassured markets about global growth.

"The FOMC holding rates in the recent policy resulted in EM currencies gaining against the dollar with the USD-INR currency pair settling below the psychological 66 per dollar figure," a dealer said.

The dollar index was up 0.11 percent in the late afternoon trade as against a basket of six currencies.

Oil prices fell in Asia, reversing sharp gains in the previous session, hit by a strong dollar and persistent concerns over a global supply glut.

Meanwhile, the benchmark BSE Sensex ended lower by 541.14 points or 2.07 percent.

In forward market today, premium for dollar showed a narrowly mixed trend in the absence of market-moving factors.

The benchmark six-month premium payable in February eased to 188-189 paise from 188.5-190.5 paise yesterday while for forward August 2016 inched up to 405-406 paise from 404-406 paise previously.

The RBI fixed the reference rate for the dollar at 65.6250 and for the euro at 73.2638.

The rupee moved up further against the pound sterling to close at 101.67 from 102.09 yesterday and also firmed up further against the euro to 73.55 from 74.00 previously.

However, the rupee declined against the Japanese currency to 54.93 per 100 yen from 54.53.