Rupee logs 2nd worst closing at 56.15 as dollar demand surges

The rupee continued its downslide for the third day in a row and declined by 19 paise to end at 56.15,its second lowest closing in history,against the US currency as cautious importers bought dollars in late trade ahead of outcome from the key US Federal Reserve meeting.

Written by Agencies | Mumbai | Published: June 20, 2012 9:03 pm

The rupee continued its downslide for the third day in a row and declined by 19 paise to end at 56.15,its second lowest closing in history,against the US currency as cautious importers bought dollars in late trade ahead of outcome from the key US Federal Reserve meeting.

At the Interbank Foreign Exchange (Forex) market,the domestic unit opened higher at 55.92 a dollar from previous close of 55.96 and immediately touched a high of 55.82 on dollar selling by exporters and initial rise in local shares.

However,as the session progressed it weakened and fell back to a low of 56.18 before concluding at 56.15,its second lowest closing. On May 30,the rupee had settled at 56.23 on May 30,2012. It has depreciated over 16 per cent since early March and hit a record low of 56.52 (intra-day) on May 31.

Forex dealers said some weakness in dollar overseas,renewed capital inflows and positive closing of local stocks capped the negative sentiment against the rupee.

“Though rupee was range bound through out the day,it depreciated during the end due to sudden demand of dollars,” said Hemal Doshi,Currency Strategist,Geojit Comtrade.

Moses Harding,Head – ALCO and Economic and Market Research,IndusInd Bank said,”Also,as the Fed is less likely to come up with a pleasant surprise (like QE3),Indian operators are cautious in taking position,”.

The euro rose marginally to USD 1.27,after adding gains of nearly 1 per cent in yesterday and within striking distance of a one-month high of USD 1.2748 hit earlier this week.

Euro edged higher today as investors waited to see if the Fed will announce fresh monetary stimulus at the end of the two-day meeting later today to boost the ailing US economy.

The dollar index,a gauge of six major rivals,was also down by over 0.05 per cent while New York crude oil was trading above USD 84 a barrel in European market today.

Meanwhile,the Indian benchmark Sensex ended up by 36.83 points today.

Pramit Brahmbhatt,CEO,Alpari Financial Services (India) said,” The hopes of US action over further easing kept alive the positive tone of global markets building pressure on dollar index which edged lower towards 81.30 levels easing some of the pressure on rupee.”

Experts also said the quarter and month-end demand for dollars from oil importers and corporates may have led to the late surge in US currency’s demand.

The premium for the forward dollar continued its upward march on sustained paying pressure from banks and corporates.

The benchmark six-month forward dollar premium payable in November closed higher at 158-159 paise from overnight level of 153-155 paise.

The far-forward contracts maturing in May also ended strong at 300-302 paise from 288-290 paise.

The RBI fixed the reference rate for the US dollar at 55.8585 and for euro at 70.8838.

The rupee plunged further against the pound sterling to end at 88.41 from yesterday’s close of 87.75 and also declined against the Japanese yen to 71.03 per 100 yen from 70.94.

However,the rupee reacted downwards against the euro to 71.37 from 70.62 previously.

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