Cutting three sessions of rise, the Indian rupee on Tuesday fell by four paise against the dollar on month-end demand for the US currency as well as weakness in local equity markets despite a weak dollar overseas.
In narrow but two-way trade at the interbank foreign exchange market, the domestic unit resumed lower at 48.23/24 a dollar from its overnight close of Rs 48.16/17 a dollar.
Forex dealers said importers, mainly oil refiners, were seen purchasing dollars for their month-end import payments, putting some pressure on the rupee. The rupee was later trapped in a range of 48.13 and 48.3050 a dollar before ending at 48.20/21.
The Indian benchmark Sensex ended lower by 43.10 points while Asian indices closed in the green and European markets were trading weak in afternoon deals.
Meanwhile, government bond prices firmed up on fresh demand from banks and corporates and call rates also ended higher at 3.30% on the overnight call money market due to sustained demand from borrowing banks.
The 7.94% government security maturing in 2021 hardened to Rs 105.70 from Rs 105.25 previously while its yield moved down to 7.21% from 7.27%.
The 8.20% government security maturing in 2022 rose to Rs 106.57 from Rs 106.20 while its yield declined to Rs 7.39% from 7.43%. The 8.24% government security maturing in 2027 firmed up to Rs 105.53 from Rs 105.15 previously.