The rupee fell by another 18 paise to close at 66.71 per dollar on Tuesday on persistent demand for the American currency from banks and importers on the back of higher greenback overseas despite sustained foreign capital inflows in domestic equities.
The rupee resumed lower at 66.58 per dollar as against Monday’s closing level of 66.53 at the Interbank Foreign Exchange market and dropped further to 66.84 on sustained dollar demand from from banks and importers before ending at 66.71, showing a loss of 18 paise or 0.27%.
The rupee has dropped by 21 paise or 0.32% in the last two sessions. It hovered in a range of 66.52 and 66.84 per dollar during the day.
The dollar index was up by 0.22% against a basket of six currencies in the late afternoon trade. The dollar climbed on Monday, paring its weekly decline last week.
The dollar steadily strengthened against its main rivals during Monday’s session after two regional Fed presidents said they would support the Federal Reserve raising interest rates at its April meeting. The pound dropped nearly 1% against the dollar, following reports of multiple explosions in Brussels. Sterling was down 0.8% to $1.4268.
Pramit Brahmbhatt of Veracity Financial Services said, “The rupee opened on a flat note following cues from global equity as well as crude prices. However, it dropped afterwards to end at 66.71.”
In forward market, premium for dollar moved down further due to persistent receivings from exporters. The benchmark six-month premium for August dropped to 202-204 paise from 206.5-208.5 paise on Monday and far forward February 2017 contract also declined further to 409-411 paise 412-414.5 pasie.
The RBI fixed the reference rate for the dollar at 66.5411 and euro at 74.8987. In cross-currency trades, the rupee firmed up further against the pound sterling to finish at 95.28 from 95.76 on Monday and also moved up to 74.76 per euro from 75.01. The rupee closed slightly lower against the yen to 59.69 per 100 yens from 59.67.