Rupee falls past 62 on oil related dollar buying

  • Reuters, Mumbai
  • Updated: Dec 10, 2014 18:11 IST

The rupee fell to its weakest against the dollar in 1-1/2 weeks on Wednesday, declining for a third consecutive session on the back of dollar demand from oil companies and caution ahead of consumer price inflation data later in the week.

Foreign institutional investors sold Indian shares worth 2.21 billion rupees on Tuesday, exchange data shows, which also weighed on the rupee.

Analysts expect the rupee to remain range-bound ahead of consumer price inflation data due on Friday. A Reuters poll showed retail inflation in November likely slowed to record low of 4.5%.

"Upcoming month- and quarter-end demand for dollars from banks and corporates would keep the rupee weak," said Anil Bhansali, vice president at Mecklai Financial.

The partially convertible rupee closed weaker at 62.02/03 per dollar, compared with Tuesday's close of 61.88/89.

The currency had earlier weakened to as much as 62.0475 to the dollar, its weakest since Dec. 1.

The fall bucked the trend of higher Asian currencies on Wednesday as the yen briefly strengthened past 119 per dollar, prompting short-covering in regional units despite rising risks of deflation in China.

In the offshore non-deliverable forwards, the one-month contract was at 62.35, while the three-month was at 62.87.

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