Rs. drops 13 paise to 55.66 on dollar demand; falls for 2nd day
The rupee today fell from its one-week high level to end the day at 55.66, down 13 paise, on sudden fag-end dollar demand from importers.business Updated: Sep 04, 2012 19:18 IST
The rupee on Tuesday fell from its one-week high level to end the day at 55.66, down 13 paise, on sudden fag-end dollar demand from importers.
A stronger dollar overseas amid choppy trading in local shares too weighed on the rupee sentiment, forex dealers said.
The rupee opened strong at 55.40 a dollar from overnight close of 55.53 at the Interbank Foreign Exchange (Forex) market and immediately touched a one-week high of 55.37 on early dollar sales by exporters.
The sentiment, however, turned negative and the rupee fell to a low of 55.70 on sudden dollar demand from importers, mainly oil refiners, and hopes of more capital outflows in near future.
It later closed at 55.66, a fall of 13 paise or 0.23% over Monday.
This is the second straight day of losses.
Traders said if it were not for Rs 300 crore of FII inflows in stocks on Tuesday, the rupee would have plunged further.
Pramit Brahmbhatt, CEO, Alpari Financial Services (India) said, "The rupee reversed its initial gains on late dollar demand from importers after rise in global crude oil prices and the rebound in dollar index."
After pulling out US$ 26.26 mln on August 31, Foreign Institutional Investors (FIIs) sold shares worth US$ 8.49mn on Monday as per Sebi data.
Meanwhile, the Indian stock market benchmark Sensex recovered its initial losses and closed up by over 56 points or 0.32% on buying in select bluechips.
The dollar index rebounded to quote a mere 0.02% higher against a basket of currencies ahead of European Central Bank's (ECB's) monthly policy meeting on September 6.
The New York crude oil was trading below US$ 97 a barrel in Europe on Tuesday.
The premium for the forward dollar dropped on fresh receipts by exporters.
The benchmark six-month forward dollar premium payable in February ended lower at 180-182 paise from Monday's close of 186-188 paise.
The premium for far-forward contracts maturing in August also dipped to 333-335 paise from 343-345 paise.
The RBI has fixed the reference rate for the US dollar at 55.5360 and for euro at 70.0190.
The rupee remained weak against the pound sterling to end at 88.36 from Monday's close of 88.20.
It also moved down against the Japanese yen to 71.00 per 100 yen from 70.92.
The rupee , however, fell back against the euro to 70.06 from its last close of 69.82.