Indian rupee continued its downward march against the US dollar for the fifth consecutive week, slipping by another eight paise to close at 66.54 per dollar after touching at 2-year low of 66.86 on persistent dollar demand from banks and importers amidst sustained foreign capital outflows.
The domestic currency opened lower at 66.60 as against last weekend’s level of 66.46 at the Interbank Foreign Exchange (Forex) market and dropped further to 2-year low of 66.86 per dollar on initial dollar demand.
However, it recovered afterwards to 66.24 per dollar following recovery in the equity market before concluding the week at 66.54 per dollar, still showing a loss of eight paise or 0.12 per cent.
It has tumbled by 273 paise or 4.27 per cent in the five weeks.
It had last ended at 67.07 on September 4, 2013.
Oil prices declined in the global market as dealers await the US Federal Reserve’s decision on whether to raise interest rates, following a mixed August jobs report, analysts said.
In the global market, the dollar was mostly range- bound ahead of next week’s highly anticipated Federal Open Market Committee meeting.
The Federal Reserve policy-makers are set to begin their next two-day meeting on Wednesday. Some market strategists and economists believe they could vote to raise interest rates next week, while others expect them to hold off.
Foreign portfolio investors (FPIs) continued their selling pressure as they sold shares net USD 284.24 millions during the first four days of the week as per the SEBI’s record.
In the forward market, the premium for dollar extended its fall on receivings from exporters.
Forward dollar premium payable in February declined to 195.5-197.5 paise from the last weekend’s level of 207-209 paise and far-forward contract maturing in August 2016 also moved down at 406.5-408 paise from 422-424 paise.
The RBI fixed the reference rate for the dollar at 66.3866 and the Euro at 74.8974, respectively from the last weekend’s level of 66.4003 and 73.8903.
The rupee dropped against the pound to end the week at 102.59 from 101.17 and also fell against the euro to 74.93 from 74.03.
However, the domestic currency recovered sharply against the Japanese currency to finish at 55.14 per 100 yen from the last weekend’s level of 55.77.