Sustained dollar demand from importers and weakness in local equities on Wednesday pulled the Indian rupee down for the third straight day with the currency ending two paise lower at 60.96 against the greenback.
Heavy selling by foreign funds on Tuesday in local stocks and better dollar overseas also kept the rupee under pressure.
At the Interbank Foreign Exchange (Forex) market, the local currency commenced lower at 61.03 a dollar from previous close of 60.94. It moved in a limited range of 60.9250 and 61.05 before settling at 60.96, a fall of two paise or 0.03 per cent.
In three straight days, it has declined 15 paise or 0.25 per cent.
Continued month-end dollar demand from importers, mainly oil refiners weighed on the rupee.
The benchmark S&P BSE Sensex on Wednesday washed out major part of afternoon session losses to end down by mere 31 points or 0.12 per cent. FPIs/FIIs pulled out USD 156.79 million on Tuesday, as per SEBI data.
The dollar index was up marginally and remained near four-year peak against major rivals, underpinned by safe-haven buying as US and Arab warplanes struck targets in Syria.
Pramit Brahmbhatt, Veracity Group CEO said, “The trading range for the spot rupee is expected to be within 60.70 to 61.40.”
The next major trigger for the markets will be the Reserve Bank of India’s monetary policy review on September 30.
“Investors believe that the authority is widely expected to keep policy rates unchanged for a fourth consecutive time as the nation continues to battle inflation,” said Suresh Nair, Director, Admisi Forex India Pvt Ltd.
