The rupee on Friday ended just one paisa down at Rs. 54.52 against the dollar, amid alternate bouts of demand-supply of the U.S. currency and capital outflows.
Forex dealers said initially the rupee sentiment was helped by a drop in March retail inflation as it gave room for RBI to cut rates on its May 3 monetary policy review.
However, weakness in local equities and a stronger dollar overseas hit the local currency later in the day.
The rupee commenced strong at Rs. 54.41 against the dollar from its previous close of Rs. 54.51 at the Interbank Foreign Exchange (Forex) market.
Later, it moved in a range of Rs. 54.34-54.62 before settling at Rs. 54.52, a loss of mere one paisa from its previous close.
Meanwhile, the BSE benchmark Sensex on Friday slumped by nearly 300 points at 18,242.56 as software major Infosys crashed by over 21 per cent due to disappointing results and a weak revenue forecast for this fiscal ignoring fall in retail inflation and better-than-expected industrial growth.
Foreign institutional investors pulled out Rs 28.59 crore from local equities, as per BSE provisional data.
Pramit Brahmbhatt, CEO, Alpari Financial Services (India) said: “On Friday rupee fell back after early rise as equity markets closed down by over one per cent also the dollar traded strong in the international market which further depreciated.”
The dollar index was up by 0.2 per cent against a basket of six major global currencies.
“The rupee did not react much to the positive set of data.
Although, Consumer Price Index (CPI) has eased month on month basis, it is still at elevated levels above 10 pct, which is still a concern,” said Abhishek Goenka, Founder and CEO, India Forex Advisors.
The industrial output data, which was announced earlier in the day, rose by 0.6 per cent in February, while retail inflation fell to 10.39 per cent in March.
