Indian rupee falls 58 paise, most in a month, to 61.83 against US dollar

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Indian rupee closed at 61.83, a fall of 58 paise, the most since since November 11, when it tumbled by 77 paise (Reuters) Indian rupee closed at 61.83, a fall of 58 paise, the most since since November 11, when it tumbled by 77 paise (Reuters)
SummaryIndian rupee closed at 61.83, a fall of 58 paise, the most since since November 11, when it tumbled by 77 paise

Weak local stocks and sustained US dollar demand from importers led the rupee to its biggest fall in a month today, closing 58 paise lower at 61.83 against the US currency.

Renewed fears of the US Federal Reserve tapering its stimulus programme earlier than expected and a firm US dollar overseas also weighed on the Indian rupee, a forex dealer said. Continued capital inflows stemmed the rupee fall, he added.

The Indian rupee resumed sharply lower at 61.60 a dollar from the previous close of 61.25 at the interbank foreign exchange market. It gradually improved to a high of 61.49 before succumbing to late heavy selling in domestic equities and US dollar demand to a low of 61.90.

The Indian rupee closed at 61.83, a fall of 58 paise, the most since since November 11, when it tumbled by 77 paise.

"It has been a weak session for the rupee amid negative stock markets and fresh demand for US dollars from oil companies," said Abhishek Goenka, CEO of India Forex Advisors. "IIP and CPI data which will be released today after market hours will be closely tracked for further cues."

The Index of Industrial Production contracted 1.8 per cent in October, compared with an 8.4 per cent expansion a year earlier, the government said. Retail inflation in November was 11.24 per cent against a revised 10.17 per cent in October.

"The released data was worse than expected. There are also now increased chances of the RBI raising interest rates by 25 bps or even 50 bps," said Admisi Forex India.

The 30-share benchmark Sensex fell for the third day in a row and closed down 245.80 points or 1.16 per cent. Foreign institutional investors bought shares worth Rs 962.71 crore yesterday, according to provisional data with stock exchanges.

The US dollar index was up 0.10 per cent against a basket of six major global currencies ahead of next week's US Fed meet.

"Indian rupee closed weak against US dollar due to increased demand for the US currency from oil importers as well as the local equities, which ended negative," said Pramit Brahmbhatt, CEO of Alpari Financial Services.

Forward US dollar premiums dropped further on persistent receipts by exporters.

The benchmark six-month forward US dollar premium payable in May moved down to 245-247 paise from 249-251 paise previously and far-forward contracts maturing in November declined to 484-1/2 to 486-1/2 paise from 489-491 paise.

The RBI fixed the reference rate for the dollar

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