Indian rupee retreats from 11-mth high on US dollar demand; logs 4th wkly gain

Written by PTI | Mumbai | Updated: May 23 2014, 23:49pm hrs
Retreating from 11-month high level, the Indian rupee today depreciated five paise to end at 58.52 against the US dollar but managed to clock the fourth successive weekly rise.

Sustained capital outflows weighed on the rupee while strong local equities limited the rupee fall to some extent, a forex dealer said.

At the Interbank Foreign Exchange (Forex) market, the domestic currency commenced slightly better at 58.45 a dollar from previous close of 58.47. It then moved erratically in a range of 58.33 and 58.56, before settling at 58.52, a net fall of five paise or 0.09 per cent.

Pramit Brahmbhatt, Veracity Group CEO said: "Rupee posted 11-month high with the help of strong local equities. Rupee gave up all the gains as the central bank intervened in the market via state-run lenders. The trading range for the Spot USD/INR pair is expected to be within 58.00 to 59.00."

The dollar index, an indicator of six major global rivals, was up by 0.21 per cent on global economic optimism.

Dollar demand from importers, mainly oil refiners, to meet their month-end requirements mainly weighed on the rupee.

For the week, the rupee gained 27 paise. In the previous three weeks, it had gained a whopping 181 paise. Hopes of economic reforms and robust capital inflows after Narendra Modi-led BJP won elections have helped rupee appreciate.

Meanwhile, the Indian benchmark S&P BSE Sensex today flared up by 318.95 points, or 1.31 per cent, to log its new closing peak. FIIs pulled out USD 19.27 million yesterday, as per Sebi data. MORE PTI VMP RSU EDM KSR 05231739


Meanwhile, premium for forward dollar recovered on fresh payments from banks and corporates.

The benchmark six-month premium payable in October rose to 208.5-210.5 paise from 201.5-203.5 paise previously.

Far-forward contracts maturing in April, 2015 also shot up to 431.5-433.5 paise from 419-421 paise.

The Reserve Bank of India fixed the reference rate for dollar at 58.4830 and for the euro at 79.8058.

The rupee improved further against the pound to 98.52 from 98.64 previously. It hardened to 79.74 per euro from 79.93. The rupee strengthened to 57.43 per 100 Japanese yen from 57.54.