The Indian rupee extended its loss 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 yesterday’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 per cent.
The rupee dropped by 20 paise or 0.30 per cent 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 per cent against a basket of six currencies in early trade.
The dollar was weaker against the yen during Asian trade today, as a decline in oil prices overnight capped gains in the greenback.
Enthusiasm over the Bank of Japan’s surprise decision 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.
Meanwhile, the benchmark BSE Sensex tumbled by 285.83 points or 1.15 per cent.
In forward market, premium for dollar recovered on fresh buying pressure from corporates.
The benchmark six-month premium payable in July moved up to 206-208 paise from 204-206 paise yesterday while far forward January 2017 contract closed higher at 415-417 paise as against 410-412 paise previously.
The RBI fixed the reference rate for the dollar at 67.8340 and for the euro at 73.9323.
In cross-currency trades, the rupee dropped against the pound sterling to end at 97.99 from 96.90 yesterday and the euro also moved down to 74.18 from 73.69.
The domestic unit declined against the yen to 56.26 from 55.92 per 100 yen. PTI RSU BPD MKJ 02021752