The Indian rupee today weakened by another 8 paise to close at 2-1/2 month low of 67.44 a dollar, falling for the seventh straight session, on persistent demand for the US currency from banks and importers amid higher crude oil prices and fall in domestic equities.
Foreign capital outflows also affected the rupee value against the dollar, a forex dealer said.
Brent crude powered back above USD 49 a barrel in Asia today as oil prices resumed their rise after the dollar eased and militants blew up another pipeline in African producer Nigeria.
The rupee resumed lower at 67.43 as against yesterday’s closing level of 67.36 at the Inter-bank Foreign Exchange (forex) market and slid further to 67.50 on initial dollar demand from importers.
However, it recovered afterwards to 67.31 before ending at more than 2-1/2 month low of 67.44 per dollar, showing a loss of 8 paise or 0.12 per cent. The domestic currency has lost 88 paise or 1.32 per cent in seven days.
It hovered in a range of 67.31 per dollar and 67.50 per dollar during the day.
The domestic currency had last ended at 67.54 per dollar as on March 2, 2016.
The dollar index was up 0.03 per cent in the late global trade against a basket of six global currencies.
Meanwhile, the RBI fixed the reference rate for the dollar at 67.4076 and euro at 75.5437.
In cross-currency trades, the rupee recovered against the pound sterling to finish at 98.19 from 98.55 yesterday.
However, it dropped against the euro to 75.65 from 75.49.
The domestic currency recouped against the yen to 61.09 per 100 yens from 61.33 previously. The dollar remained flat against the yen and the euro during Asia trade today as investors avoided taking strong positions, settling into a wait-and-see mode concerning the US Federal Reserve’s next move.
The dollar has gained traction in recent trade after this week’s release of April Fed policy meeting minutes raised hopes for a rate increase soon. The minutes showed that policy setters discussed the possibility of a June rate rise if the economy continued to strengthen.
Pramit Brahmbhatt of Veracity Financial Services said, “Heavy ‘sell-off’ from FIIs, higher crude oil prices and weak global as well as domestic equity market put pressure on the rupee and thus it opened weak compared to previous close of 67.36/USD.
“Ever since opening the rupee continued to trade with negative bias. Our benchmark index Nifty lost nearly 33 points to end the day and close at 7,750 level. Thus to end the day, the rupee closed with a loss of 8 paise at 67.44/USD. Trading range for the spot USD/INR pair will be 67.20 to 67.60/USD.”
In forward market, premium for dollar continued to fall on persistent receivings from exporters.
The benchmark six-month premium for October moved down further to 183-185 paise from 185.5-187.5 paise yesterday and far forward April 2017 contract also dropped to 384-386 paise from 390.5-392.5 paise.
Meanwhile, the benchmark Sensex ended lower by 97.82 points or 0.39 per cent to close at 25,301.90.