The rupee fell 53 paise, or 1%, on Friday to close at 55.41 against the US dollar on the back of a strong demand for the American currency from importers amid weakness in the euro and negative stock cues in Asia after European Central Bank (ECB) cut its key interest rates on Thursday.
“Weakening in the rupee in today’s trade was because of weakness in global market,” said Pramit Brahmbhatt, chief executive officer, Alpari Forex.Dealers said the ECB’s slashing key interest rate to a record low of 0.75% increased the demand for the dollar from importers, particularly oil companies, weighing on the rupee value.
In New York, the dollar gained over 1% against the euro on Thursday, following the European Central Bank cut interest rates.
After opening at 55.45 against the dollar, the rupee fell to a low of 55.6 on Friday before closing the day at 55.41 lower than Thursday’s close of 54.94.
The Reserve Bank of India (RBI) was said to have sold dollars to support the rupee around 55.62 level. “Rupee movement in coming days will be more determined by the development in the domestic front than external factors,” said Abhishek Goenka, chief executive officer, India Forex Advisors.