January 24: The rupee weakened to a 16-month low on Monday due to heavy dollar demand from the State Bank of India (SBI), which was seen bidding on behalf of large-oil firms. The rupee touched an intra-day low of 43.66/6650, but rebounded in late-afternoon trades to end four paise weaker at 43.61/6150 against the dollar. The rupee opened at 43.58/59 from Friday's close of 43.57/575.Demand from SBI came in early trades, which led to panic covering by importers and corporates.Dealers said that the RBI was indirectly selling dollars in the afternoon, which gave some cushion to the market. Cash/spot ended at 0.75/1.25 paise, cash/tom at 0.25/0.5 paise and tom/spot at 0.75/1 paise. The RBI fixed its reference rate for the dollar at 43.64 as compared to 43.58 on Friday.
FORECAST: Rupee may weaken in case of renewed dollar buying by SBI on Tuesday.
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