Snapping its two-day gaining streak, the rupee on Wednesday weakened by 15 paise to close at 63.30 against the US currency on fresh month-end dollar demand from importers amid fall in stock markets.
The rupee resumed lower at 63.22 per dollar as against the previous closing level of 63.15 per dollar at the Interbank Foreign Exchange (Forex) Market and hovered in a range of 63.14 and 63.3850 during the day.
It concluded at 63.30 per dollar, showing a loss of 15 paise, or 0.24%. The domestic currency had gained 41 paise or 0.65% in the previous two days.
"Month-end dollar demand from importers forced the rupee to depreciate over a quarter per cent to close on a weak note," Veracity Group CEO Pramit Brahmbhatt said, adding that the dealers also took cues from weak local stocks markets which closed down by over half per cent.
Consistent selling by foreign portfolio investors (FPIs) on concerns over the MAT issue was also a reason behind fall in the rupee. FPIs sold shares worth Rs 1,532.84 crore on Tuesday, as per provisional data.
Analysts said the trading range for the Spot USD/INR pair is expected to be within 63.00 to 63.60.
The dollar index was down by 0.13% against a basket of six major global currencies.
In the overseas market, the US dollar weakened against the euro and a host of other rivals for a fourth session on Tuesday.
The benchmark BSE Sensex dropped by 170.45 points or 0.62% on Wednesday.
In the forward market, the premium dropped on fresh receivings by exporters.
The benchmark six-month premium payable in September moved further to 191-193 paise from 197.5-199.5 paise on Tuesday while forward contracts maturing in March 2016 fell to 408-410 paise from 416-418 paise.
The Reserve Bank of India fixed the reference rate for dollar at 63.2025 and for the euro at 69.3395.
The rupee declined further against the pound sterling to 97.23 from 96.53 on Tuesday and also fell against the euro to 69.64 from 69.06.
However, it firmed up further against the Japanese yen to 53.08 per 100 yen from 53.12 on Tuesday.