The rupee on Friday fell sharply by 23 paise to close at 44.42/43 against the U.S. currency on fresh dollar buying by banks and importers amid weak equity markets.

At the Interbank Foreign Exchange market, the domestic unit opened weak at 44.30/31 a dollar from its last close of 44.19/20.

Yesterday, it had closed at a 25-month high of 44.12.

Dealers said dollar demand from some banks and importers and weakness in stock markets weighed on the rupee sentiment.

The BSE benchmark Sensex today ended lower by over 65 points or 0.32 per cent after a steep fall of nearly 228 points or 1.11 per cent on Thursday.

However, the dollar held stable ahead of the US jobs data and Group of Seven (G7) and International Monetary Fund (IMF) meeting later in the day.

Foreign institutional investors (FIIs) continued their buying spree and gave a support to the rupee recently. FIIs pumped a record over USD 21 billion in 2010 so far.

Meanwhile, global crude Oil prices were trading near USD 80 a barrel in London.

The rupee premium for the forward dollar remained weak on sustained receivings by exporters. The benchmark six-month forward dollar premium payable in March closed down at 127-1/2 -129-1/2 paise from 129-131 paise on Thursday and far-forward maturing in September also finished lower at 237-239 paise from 242-244 paise previously.

The Reserve Bank of India has fixed the reference rate for the dollar at Rs. 44.38 and the euro at Rs. 61.80.

In cross-currency trade, the domestic unit rose against the pound sterling and the euro while declined against the Japanese yen.

The rupee recovered to Rs. 70.49/51 per pound sterling from Thursday’s close of Rs. 70.70/72 and also firmed up to Rs. 61.70/72 per euro from Rs. 61.79/81 previously.

It, however, declined further against the yen to Rs. 54.01/03 per 100 yen from its last close of Rs. 53.71/73.

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