The Indian rupee today hit nearly a six- month low of 55.41 by losing a staggering 30 paise,due to sustained US dollar demand from importers and weak local equities,extending losses for the third straight session.
The rupee resumed higher at 54.97 per dollar from previous close of 55.11 at the Interbank Foreign Exchange market.
It touched a high of 54.80 at initial stages on early rally in equities but later,fell back to a low of 55.42 before concluding at 55.41,showing a fall of 30 paise,or 0.54 per cent. This is rupee’s lowest level this year. It had closed at 55.45 on November 27,2012.
“The rupee weakened on account of fall in equities and firmness in dollar against euro and other peers overseas. It is likely to fall to 56-level this week,” said Ashtosh Raina,chief dealer at HDFC Bank.
The benchmark BSE Sensex today dipped by over 112 points,or 0.56 per cent.
FIIs injected Rs 679.44 crore (USD 122.6 million) in local equities today,as per BSE provisional data.
The dollar index,consisting of six major currencies,was up by 0.35 per cent,ahead of tomorrow’s US Federal Reserve meeting.
There have been reports that Fed’s bond buying programme may end earlier than expected. The bond purchases inject fresh dollar in the market and earlier than expected closing may increase dollar demand as supply gets reduced,said treasury head of a bank.
Pramit Brahmbhatt,CEO,Alpari Financial Services (India) said: “The dollar index,which measures the US dollar’s value against a basket of six major currencies,traded strong throughout the day which depreciated rupee by over 0.50 per cent.”
“It was a weak session for the rupee which was seen surpassing the key level of 55.20. Globally,the strong US dollar,weak Euro and negative stock markets added pressure on the rupee.
“Tomorrow’s FOMC minutes,Bernanke’s speech and BOJ press conference will be the key drivers for the forex market,” said Abhishek Goenka,Founder and CEO,India Forex Advisors.
Meanwhile,the premium for the forward dollar closed steady to better on stray paying pressure from banks and corporates.
The benchmark six-month forward dollar premium payable in October ended at its overnight level of 155-157 paise while far-forward contracts maturing in April moved up to 319-321 paise from 315-1/2-317-1/2 paise.
The RBI fixed the reference rate for the US dollar at 55.0395 and for the euro at 70.9269.
The rupee remained weak gainst pound sterling to 83.92 from overnight close of 83.76 and also dipped further against the euro to 71.22 from 70.89.
It too settled lower against the Japanese yen to 53.93 per 100 yen from last close of 53.73.