Indian rupee falls 28 paise to 62.01 against US dollar

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Indian rupee slipped below the 62 level against the US dollar (Reuters) Indian rupee slipped below the 62 level against the US dollar (Reuters)
SummaryIndian rupee also declined on renewed US dollar demand from importers and banks amid bearish local equities

After a brief respite, the Indian rupee slipped below the 62 level against the US dollar today, falling 28 paise ahead of the RBI's policy review and the two-day US Federal Reserve meeting.

The Indian rupee also declined on renewed US dollar demand from importers and banks amid bearish local equities. Its fall was restricted by foreign fund inflows and a weak US dollar overseas.

At the interbank foreign exchange market, the Indian rupee opened lower at 61.75 a US dollar. It gradually moved to a low of 62.03 before settling at 62.01, a fall of 28 paise or 0.45 per cent. Yesterday, it rose 39 paise.

"The gains posted by the rupee yesterday on the back of dollar selling by the RBI were wiped out in the initial trade. The expectation of interest rate hike by the RBI and some hints of tapering from the Fed are putting pressure on the rupee," said Abhishek Goenka, CEO of India Forex Advisors.

The benchmark 30-share Sensex declined for the sixth straight session and closed 47.38 points lower amid increasing expectations of an interest rate hike by the RBI tomorrow as it seeks to combat inflation.

Overseas investors bought shares worth a net Rs 159.55 crore yesterday, according to provisional data with the stock exchanges.

"Indian rupee ended week against US dollar due to renewed demand for the US currency from banks and importers," said Pramit Brahmbhatt, CEO of Alpari Financial Services (India). "The dollar index, which measures the US currency's value against a basket of six major currencies, traded in a narrow range ahead of the Federal Open Market Committee meeting."

Forward US dollar premiums ended with minor changes. The benchmark six-month forward US dollar premium payable in May closed at 245-247 paise from 245 to 247-1/2 paise and far-forward contracts maturing in November finished at 490 to 492-1/2 paise from 490-492 paise.

The RBI fixed the reference rate for the dollar at 61.9580 and for the euro at 85.3345.

The Indian rupee fell to 101.06 against the pound from 100.74 yesterday and turned negative to end at 85.34 per euro from 85.11. It dropped to 60.26 per 100 Japanese yen from 59.93.

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