Rupee logs biggest loss in 3 weeks, down 36 pts at 62.20 vs $
The rupee fell 36 paise, its biggest loss in three weeks, to close at 62.20 versus the dollar on Tuesday as pent up demand of the American currency and a drop in regional currencies weighed.business Updated: Feb 18, 2014 18:46 IST
The rupee fell 36 paise, its biggest loss in three weeks, to close at 62.20 versus the dollar on Tuesday as pent up demand of the American currency and a drop in regional currencies weighed.
The local currency dropped on a day when the equity benchmark Sensex spurted by over 170 points.
At the Interbank Foreign Exchange (Forex) market, the rupee commenced lower at 62.02 a dollar from the previous close of 61.84. Later, it declined to a low of 62.31, before settling at 62.20, a fall of 36 paise or 0.58%.
In the previous two sessions, rupee rose by 58 paise or 0.93%. Today's drop is the biggest since the 44-paise fall on January 27.
"Initiating the session on a weaker note today, rupee was seen continuing with its losses during the day against dollar. Slight recovery in dollar index, downbeat data from Germany and dollar demand in the local market were some of the factors leading to weakness in rupee," said Abhishek Goenka, founder & CEO, India Forex Advisors.
Regional currencies like the Yen slid to its weakest levels this month amid reports that Bank of Japan said it will continue monetary easing to meet its inflation target.
Some analysts suggested that rupee's depreciation on Tuesday was linked to fears that fiscal projections in interim budget may not be met.
"FY14 fiscal deficit was contained at 4.6% of GDP. FY15 fiscal deficit is placed at 4.1%. We see 50-100 bps upside risk to fiscal projections. Centre's net borrowing, at Rs 4919 billion, came in line with expectations. In our view, there are upside risks to government issuance," said a Bank of America Merrill Lynch report.
FIIs had injected $83.91 million on Monday as per Sebi data.