The rupee fell for the second day, dropping three paise to close at 62.44 against the dollar, amid demand for the US currency from oil refiners even as local equities firmed up on optimism about GDP data.
A weak dollar overseas and sustained capital inflows into local stocks limited the rupee’s decline, a forex dealer said.
At the interbank foreign exchange market, the rupee opened higher at 62.30 a dollar from the previous close of 62.41. The local currency moved in a range of 62.20 to 62.64 before settling at 62.44, a fall of three paise. Yesterday, it dropped 27 paise.
The rupee advanced for the second straight week, adding a total of 67 paise. However, the local currency fell 94 paise in November, the first monthly drop in three.
“Month-end oil-related dollar demand kept rupee under pressure. Dollar index was trading weak and was heading towards the third weekly fall in a row, taking cues from mixed economic data,” said Pramit Brahmbhatt, CEO, Alpari Financial Services (India).
The 30-share benchmark Sensex flared up 257 points, or 1.25 per cent, on expectations economic growth is recovering.
The country’s GDP expanded 4.8 per cent in July-September compared with 4.4 per cent in April-June, the government said after the markets closed.
Also, the fiscal deficit in the first seven months (Apr-Oct) of FY14 reached 84.4 per cent of the full-year budget target compared with 71.6 per cent last year.
Overseas investors bought a net Rs 102.91 crore of shares on Thursday, according to provisional data.
The dollar index, consisting of six major global rivals, was down 0.03 per cent.
“The surging Indian stock market and the flat dollar index didn’t provide help to the falling rupee,” said Abhishek Goenka, CEO of India Forex Advisors. “Dollar demand is seen coming back to the markets.”
A dollar-rupee swap window for foreign currency deposits by non-resident Indians is scheduled to close on Saturday. The facility was opened by the Reserve Bank of India on September 10.