The rupee on Tuesday fell by 19 paise to close at 54.36 against the dollar due to month-end demand for the US currency from importers.
However, persistent foreign fund inflows and weak dollar overseas restricted the rupee fall’s to some extent, forex dealers said.
The local currency resumed lower at 54.25 a dollar, which was also to be the day’s high, from previous close of 54.17 at the Interbank Foreign Exchange (Forex) on early weakness in domestic stocks and renewed dollar demand from importers, mainly oil refiners to meet their month-end requirements.
It later moved down to a low of 54.41 before settling at 54.36, a fall of 19 paise, or 0.35 per cent.
Foreign institutional investors had pumped in $132.5 million (Rs 717.89 crore), according to provisional BSE data.
Pramit Brahmbhatt, CEO, Alpari Financial Services (India) said: “Rupee ended weak today on month-end dollar demand. Looking at the global scenario expect rupee to trade weak with Political uncertainty which was also reflected in the weak local equities.
Following recovery in the euro, the dollar index was down by 0.10 per cent ahead of the release of a slate of US economic data later in the day.
“The rupee traded in a tight range and ended weak. It was seen under pressure on the back of the month-end dollar demand from importers despite small recovery in equity markets amid worries over domestic political stability. The outlook for Euro remains negative as the political & economic grid lock will continue to put pressure on euro in near term,” said Abhishek Goenka, Founder & CEO, India Forex Advisors.
Meanwhile, the BSE benchmark index on Tuesday broke its seven-session of losing string and closed up by 23.11 points to 18,704.53.
The premium for the forward dollar dropped sharply on fresh receipts by exporters.
The benchmark six-month forward dollar premium payable in August dipped to 162-1/2-164-1/2 paise from previous close of 172-1/2-174 paise.
Far-forward contracts maturing in February also tumbled to 331-1/2-333-1/2 paise from 339-1/2-341 paise.
The RBI fixed the reference rate for the US dollar at 54.2735 and for euro at 69.8803.
The rupee improved further against the euro to 69.77 from Monday’s close of 70.38 while turned negative against the Japanese yen to end at 57.61 per 100 yen from 57.17.
However, it ended stable against the pound sterling at its overnight level of 82.43.
The Forex and Money markets will remain closed on Wednesday, March 27, for ‘Holi’.
