Indian rupee came off from 2-1/2-month low to close at Rs 62.68

Written by PTI | Mumbai | Updated: Feb 1 2014, 22:33pm hrs
Indian rupeeAmid fears of outflows after the US Federal Reserve announcement, the rupee closed at 62.68, a fall of 12 paise.
The rupee came off from 2-1/2-month low of 63.32 registered on Monday following further stimulus tapering by US Federal Reserve and month-end dollar demand from importers, mainly oil refiners, recovered later to close down by a mere two paise at 62.68 against the Greenback during the week.

Weakness in local equities and fresh capital outflows also later weighed on the rupee. Indication of end in further hike in the key interest rates by the Reserve Bank of India (RBI) helped the rupee to recover some ground.

At the Interbank Foreign Exchange (Forex) market, the domestic unit commenced lower at 62.84 a dollar from previous weekend's close of 62.66 and immediately touched a low of 63.32 -level not seen since November 14, 2013 when it had touched an intra-day low of 63.34.

It later recovered and logged a high of 62.1050 before settling the week at 62.68, revealing a fall of two paise or 0.03 per cent. Last week, it has plunged by 112 paise or 1.82 per cent.

The Indian benchmark S&P BSE Sensex tanked by 620 points or 2.93 per cent while FIIs pulled out USD 407.40 mln in first four days of the week, as per Sebi data.

Meanwhile, RBI in its monetary policy review hiked the repo rate by 0.25 per cent to 8.0 per cent and kept the cash reserve ratio (CRR) unchanged at 4.0 per cent.

Pramit Brahmbhatt, CEO, Alpari Financial Services (India), "Rupee started the week on a weak note but slowly gained during the week, still closing on a negative note.

"Rupee traded strong on Tuesday mainly after RBI surprisingly raised interest rates to reduce inflation and also stated that if retail inflation eases as projected, it does not foresee further near-term monetary policy tightening.

"Local equities continued to fall and closed down at a 9 week low. The trading range for the spot rupee is expected to be within 62.00 to 63.50."