The Indian rupee snapped its last two weeks of a winning run against the American currency, slipping eight paise to 63.47 per dollar on fresh demand for the greenback as the latter firmed up in the overseas market.
However, persistent foreign capital inflows into the equity market cushioned the rupee’s fall to some extent, a forex dealer said. Investors infused USD 334.60 million during the first four days of the week, according to Sebi data.
The rupee resumed lower at 63.44 as against the last weekend’s level of 63.39 at the Interbank Foreign Exchange (Forex) market and dropped further to 63.58 on solid dollar demand from importers as crude oil prices in the global markets softened.
However, it recovered afterwards to 63.35 on selling of dollars by exporters as foreign inflows into the equity market picked up, before finishing at 63.47, a loss of 8 paise, 0.13 per cent.
The domestic currency hovered in a range of 63.35 and 63.58 during the week.
It had gained 25 paise, or 0.39 per cent, in the past two weeks.
Globally, the dollar firmed up against its major rivals after Greece showed some signs of stability with the debt deal with its creditors, allowing market focus to shift back to US and European yield differentials.
Oil prices tumbled further after the historic nuke deal between Iran and Western powers which means Iran will add more crude to the already saturated global market. The dollar also perked up after US Fed chair Janet Yellen during an appearance before the House Financial Services Committee said favourable economic conditions may warrant an interest rate hike this year.
In a bid to streamline the FDI structure, the government introduced a composite foreign investment cap by clubbing all forms of overseas investments to define sectoral limits.
Meanwhile, the Indian benchmark Sensex rose 801.91 points, or 2.90 per cent, to end at 28,463.31.
In the forward market, the premium ended lower on persistent receivings from exporters.
Forward dollar premium payable in December ended down at 203.5-205.5 from last weekend’s level of 210-212 paise and far-forward contract maturing in June 2016 also closed lower at 431.5-433.5 paise as against the last weekend’s level of 433-435 paise.
RBI fixed the reference rate for the dollar at 63.4928 and the euro at 69.1437 from the preceding weekend’s level of 63.3793 and 70.4334, respectively.
The rupee fell against the pound to close the week at 99.15, from 98.48 in the previous weekend, while it recovered to 69.11 against euro, from the earlier 70.91.
The domestic currency also recouped against the Japanese currency to end at 51.17 per 100 yen from the preceding weekend’s level of 51.84.