The rupee on Monday weakened by 36 paise to close at 57.87 against the US currency on fresh dollar demand from importers and some banks even as RBI kept its policy rates on hold and stock markets posted gains.
At the Interbank Foreign Exchange (Forex) market, the local unit resumed weak at 57.70 a dollar and moved in a range of 57.55 and 57.90 during the day. It settled at 57.87, a fall of 36 paise or 0.63 per cent. Last Friday, it had risen by 47 paise or 0.81 per cent.
“Rupee started the week on a weak note by depreciating more than half per cent during the day against dollar as dollar index which measures the greenback against a basket of six other currencies traded strong against the other major currencies,” Pramit Brahmbhatt, CEO, Alpari Financial Services (India) said.
“The trading range for the Spot USD/INR pair is expected to be within 57.40 to 58.10,” he added.
Renewed dollar demand from banks and importers in view of firm dollar overseas mainly affected the rupee value, a forex dealer said.
Sustained capital outflows also weighed on rupee, the dealer said. FIIs pulled out Rs 305.68 crore last Friday as per provisional data with stock exchanges.
“We saw rupee appreciating today after the RBI kept the rates on hold. The trade deficit of India widened to USD 20.14 billion for May but rupee did not react to this data,” India Forex Advisors CEO Abhishek Goenka said.
The BSE benchmark index Sensex on Monday rose by 148 points or 0.77 per cent.
In the international market, the US dollar was trading up by 0.14 per cent against key rivals, coming off a string of losses before the Federal Reserve’s policy decision later this week.
Meanwhile, premium for forward dollar recovered on fresh paying pressure from banks and corporates.
Benchmark six-month forward dollar premium payable in November rose to 151-152 paise from last Friday’s close of 148-150 paise and far-forward contracts maturing in May also firmed up to 301-1/2-303-1/2 paise from 298-300 paise.
The RBI fixed the reference rate for the US dollar at 57.7310 and for the euro at 76.9628.
Rupee fell back sharply against the pound sterling to 90.94 from last weekend’s close of 89.97 and also dropped against the euro to 77.20 from 76.59.
It too dipped against the Japanese yen to 61.04 per 100 yen from 60.59.