The rupee extended its losses for the second-straight day, slipping by another 14 paise to 67.98 per dollar on sustained demand for the US currency from banks and importers amid a massive fall in equities as the Reserve Bank kept its key policy rate unchanged.
The domestic unit resumed slightly lower at 67.85 as against Monday’s closing level of 67.84 at the Interbank Foreign Exchange market and dropped further to 67.99 before finishing at 67.98 per dollar, showing a loss of 14 paise or 0.21%.
The rupee dropped by 20 paise or 0.30% in two days.
It moved in a range of 67.7700 per dollar and 67.9950 per dollar during the day.
However, the dollar index was down by 0.07% against a basket of six currencies in early trade.
The dollar was weaker against the yen during Asian trade on Tuesday, as a decline in oil prices overnight capped gains in the greenback.
Enthusiasm over the Bank of Japan’s surprise decision on Friday to introduce the nation’s first negative interest rates had pushed up the dollar. But investors sold off the dollar after the steep fall in oil prices overnight as they sought refuge in the yen’s safe-haven status.
Pramit Brahmbhatt of Veracity Financial Services said, “As the rupee started to trade below 67.8, we saw the rupee weakening ahead. After the announcement of RBI monetary policy (unchanged interest rate), we saw a sudden selling pressure that resulted into loss of 100 points in Nifty.
Thus the rupee continued to trade weaker that closed with a loss of 14 paisa at 67.98 level. Trading range for spot USD/INR pair is expected to be within 68.2 to 67.5 range.