The rupee today tumbled by 29 paise today to close at nearly two—month low of 45.15/16 against the US currency, following weakness in equities amid heavy capital outflows and fresh dollar demand despite weak global cues.

“The rupee lost more than half a per cent against the dollar and fell over an eight—week low as local equities failed to perform and closed down by almost 1 per cent and euro also continued to lose against the greenback,” Alpari Forex (India) CEO Pramit Brahmbhatt said.

“Expect USD/INR pair to touch 45.50 in the coming days.

The trading range for the USD/INR will be between 44.90—45.40 tomorrow,” he added.

At the Interbank Foreign Exchange (Forex) market, the domestic unit opened sharply lower at 45.03/05 a dollar from previous close of 44.86/87 and moved in a range of 44.95 and 45.18 before concluding at 45.15/16, a steep fall of 0.65 per cent. Last time, it had ended at 45.18/19 on March 17, 2011.

Sluggish equities, after rise in petrol prices since Saturday midnight by state—owned oil companies which expected to add inflation, mainly weighed on the rupee. The BSE benchmark Sensex today closed sharply down by over 186 points, or 1.01 per cent, at 18,345.

Increased capital outflows, too, put pressure on the rupee. Foreign Institutional Investors (FIIs) pulled a massive USD 1.02 billion in two days (May 12 and 13), taking the total to nearly USD 1.59 billion in the current month so far.

Fresh dollar demand from importers and some banks also weighed on the rupee.

However, the dollar index, gauging six major currencies, was down by 0.24 per cent in European market today.

Meanwhile, headline inflation was marginally down at 8.66 per cent in April from 8.98 per cent in March.

The rupee premium for the forward dollar finished sharply lower on fresh heavy receiving by exporters. The benchmark six—month forward dollar premium payable in October concluded at 120—122 paise from last Friday’s level of 137—139 paise.

Far—forward contracts maturing in April closed distinctly weak at 253—255 paise from 280—282 paise in the previous session.

The RBI has fixed the reference rate for the dollar at Rs 45.07 and the euro at Rs 63.57.

The rupee fell back against the pound sterling to settle at 73.03/05 from last Friday’s closing of Rs 72.95/97 and also dropped against the Japanese yen to Rs 55.89/91 per 100 yen from Rs 55.57/59 the previous close.

It, however, recovered to Rs 63.68/70 per euro from its last close of Rs 74.05/07.

Keywords: rupeeforexdollar

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