Tracking steep losses in local stocks, the Indian rupee today slipped 34 paise — its worst drop in two weeks — to close at 62.67 against the US dollar amid month-end demand for the American currency.
Crude prices jumped on reports that Saudi Arabian air strikes in Yemen raised concerns of supply disruptions, leading to higher dollar demand from importers, including oil firms.
On the New York Mercantile Exchange, light, sweet crude futures for delivery in May climbed USD 1.93, or 3.9 per cent, to USD 51.12 a barrel in the Globex electronic session.
The yen strengthened against its major rivals, hitting a one-month high against the dollar in Asian trade Thursday, with investors buying the Japanese currency after overnight US and Eurozone stock market weakness spread into Asia.
The Indian rupee resumed lower at 62.55 per dollar as against the last closing level of 62.33 per dollar at the Interbank Foreign Exchange (Forex) market today.
It dropped further to 62.78 before concluding at 62.67, showing a loss of 34 paise or 0.55 per cent from last close.
The domestic currency touched a intraday high of 62.5350.
The rupee fell for the second straight session on Thursday.
The Indian stock benchmark Sensex tumbled by 654.25 points or 2.33 per cent to close at 27,457.58 on rising geopolitical tension and capital outflow worries.
“Losses in shares amid speculation that foreign portfolio investors may be exiting markets also weighed on the currency. Traders settling futures contract ahead of expiry is pushed the currency pair higher,” said Suresh Nair, Director, Admisi Forex India.
Pramit Brahmbhatt, Veracity Group, CEO said: “The trading range for the Spot USD/INR pair is expected to be within 62.20 to 63.20.”
Meanwhile, the forward premia declined further on sustained receipts by exporters.
The benchmark six-month premium payable in August moved down further to 215-217 paise from 221-1/2-223-1/2 paise yesterday. Forward contracts maturing in February 2016 also dropped further to 443-445 paise from 453-1/2-455-1/2 paise previously.
The Reserve Bank of India fixed the reference rate for dollar at 62.6728 for Euro at 68.8523.
The rupee dropped further against the pound to 93.64 as against 92.88 previously while continued to decline against the euro to 68.91 per euro from 68.42 previously.
The domestic currency also ended lower against the 100 Japanese yen to 52.80 from 52.14 yesterday.