Extending gains for the second straight day, the rupee today firmed up by another 5 paise to 67.85 on persistent selling of dollars by banks and exporters in view of weaker American currency in the overseas market despite fall in domestic equities.
The domestic unit resumed flat at yesterday’s closing level of 67.90 per dollar at the Interbank Foreign Exchange (Forex) Market and dropped further to 67.9850 on initial dollar demand from banks.
However, it recovered afterwards to 67.8150 on fresh selling of dollars by banks and exporters due to weakness in US currency overseas before concluding at 67.85, showing a loss of five paise or 0.07 per cent.
The domestic currency has gained 9 paise or 0.13 per cent in two days.
The local currency hovered in a range of 67.8150 and 67.9850 per dollar during the day.
The dollar index was up by 0.02 per cent against a basket of six currencies in the late afternoon trade.
However, the yen was stronger against its rivals during Asia trade today, as another round of Tokyo stock selling dampened sentiment to induce buying of the safe-haven Japanese currency.
The Japanese currency has gained momentum in recent trade with nervous investors seeking shelter from a deepening risk-aversion mood caused by the continued plunge in oil prices and a big sell-off in global stocks.
The benchmark Sensex dropped by 262.08 points or 1.09 per cent to end at 23,758.90.
Pramit Brahmbhatt of Veracity Financial Services said, “Despite fall in domestic equity market, we saw strength in rupee. Our benchmark index Nifty closed with a loss of 82 points. Thus rupee closed with a loss of 7 paisa at 67.85 levels. Trading range for spot USD/INR pair is expected to be within 67.55-68 levels.”
In forward market, premium for dollar declined on fresh receivings from exporters.
The benchmark six-month premium payable in July closed lower at 200-202 paise from 202-204 paise yesterday and far forward January 2017 contract also moved down to 411-413 paise from 413-415 paise.
The RBI fixed the reference rate for the dollar at 68.8781 and for the euro at 76.6480.
In cross-currency trades, the rupee dropped further against the pound sterling to end at 98.46 from 98.05 yesterday and also fell further against the euro to 76.39 from 76.18.
However, the domestic unit recovered marginally against the yen to 59.03 from 59.06 per 100 yen.