The rupee fell for the seventh session in a row on Wednesday closing down by 5 paise at an 11-week low against the dollar as strong demand for the US currency washed out early gains, despite smart recovery in stock markets.
At the Interbank Foreign Exchange (Forex) market, the rupee ended at 45.25/26, a loss of 5 paise over last close.
The domestic currency opened strong at 45.01/02 a dollar and touched a high of 44.95 on strong jump in equities.
However, sustained dollar demand from importers, mainly oil refiners, in the later part of the day weighed on the sentiment and the rupee fell back to a low of 45.29 before closing at 45.25/26, dealers said.
The BSE Sensex jumped by 273 points to regain the 17,000 mark as investors picked up equities globally at bargain levels after the US Fed decided to keep interest rates at all time low to check economic dip.
“The rupee was not able to sustain initial gains on account of crashing premiums in the forward market. Steep fall in the premiums was on account of demand for dollar to make oil payments to Iran. India owes about USD 4 billion to Iran for its crude oil imports from the former,” India Forex Advisors CEO Abhishek Goenka said.
The rupee premium for the forward dollar crashed further on sustained receiving by exporters. The benchmark six—month forward dollar premium payable in January tumbled to 52—56 paise from Tuesday’s close of 82—1/2—84—1/2 paise.
Far-forward contracts maturing in July also slumped to 118-122 paise from 152-154 paise previously.
