The rupee continued to slide against the dollar for the fifth day in a row and closed down 47 paise at a fresh two-month low of 63.71 on Tuesday amid bearish local equities and demand for the US currency from importers.
A firm dollar overseas also weighed on the rupee as the dollar index, consisting of six major global rivals, was up by 0.28 per cent.
At the interbank foreign exchange market, the domestic currency resumed lower at 63.35 and moved in a range of 63.30 to 63.84 against the dollar before settling at 63.71, a fall of 47 paise or 0.74 per cent.
The rupee has plunged 209 paise, or 3.39 per cent, in five straight sessions. It is at the lowest level since closing at 63.84 on September 10.
“Rupee was seen depreciating against the US dollar due to persistent dollar strength, rising dollar demand from the domestic oil companies and debt market outflows. Also, the stock markets which ended the session on a negative note contributed to the weakness in the local currency,” said Abhishek Goenka, CEO of India Forex Advisors.
The 30-share benchmark S&P Sensex tumbled 209.05 points, or 1.02 per cent, to a one-month low, completing six days of losses. Overseas investors pumped in Rs 333.50 crore in stocks on Monday, according to provisional data.
Shares traded weak and fell for the sixth consecutive day, which led to the rupee depreciation, said Pramit Brahmbhatt, CEO of Alpari Financial Services (India).
Forward dollar premiums closed steady to firm on stray paying pressure from banks and corporates.
The benchmark six-month forward dollar premium payable in April ended at 255-257 paise from 255-1/2-257-1/2 paise previously and far-forward contracts maturing in October improved to 495-1/2-497-1/2 paise from 490-492 paise.
The RBI fixed the reference rate for the dollar at 63.5930 and for the euro at 85.1515.
The rupee softened to 101.20 against the pound from 101.14 previously and to 63.90 per 100 Japanese yen from 63.70. It dipped to 85.32 per euro from 84.70.