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Updated: October 15, 2012 18:36 IST

Rupee weakens by 20 paise to end at 53.01 on heavy USD demand

PTI
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the domestic currency resumed lower at 53.00 a dollar as against last Friday’s close of 52.81.
The Hindu
the domestic currency resumed lower at 53.00 a dollar as against last Friday’s close of 52.81.

In lacklustre trade, the rupee on Monday depreciated for the second straight day to close 20 paise down at 53.01 on sustained dollar demand from importers.

At the Interbank Foreign Exchange (Forex) market, the domestic currency resumed lower at 53.00 a dollar as against last Friday’s close of 52.81.

Continued dollar demand from importers, mainly oil refiners, weighed on the rupee. The New York crude oil was quoting above USD 92 a barrel in Europe.

The rupee moved in a narrow range between 52.91 and 53.15 amid WPI showing that inflation rose to its highest level this fiscal at 7.81 per cent in September, a development that may restrain RBI from cutting interest rates at its monetary policy later this month on October 30.

However, weakness in dollar overseas and continued capital inflows limited the rupee fall to some extent, dealers said.

Finally, rupee settled at 53.01, showing a fall of 20 paise or 0.37 per cent. Last Friday, it was down by 13 paise. “The rupee was seen trading in a tight range of 25 paise. The higher inflation figure would restrict the RBI to cut the interest rates in its next policy review on October 30,” said Abhishek Goenka, Founder & CEO, India Forex Advisors.

The rupee is seen tracking back the international factors as we saw during the day that the strength in the Euro made the rupee to drift lower to 52.90 levels, he added.

However, the dollar index was down marginally against a basket of six major global rivals as investors awaited a meeting of European Union leaders later this week amid speculation of a Spanish bailout and help for Greece.

Meanwhile, the Indian stock market benchmark Sensex, which was down till afternoon session, recovered later and closed up by 38.37 points or 0.21 per cent after Europe opened higher.

Pramit Brahmbhatt, CEO, Alpari Financial Services (India) said: “The WPI number continued to weigh on rupee but with the dollar index retreating from its high, the rupee pared its weakness towards the close.

“Spain’s bailout plan and Greece finances have been under the lens all through even at the Brussels meet. The Chinese Q3 numbers from Asia shall be the most sought after data.” The premium for the forward dollar ended with slight changes either side.

The benchmark six-month forward dollar premium payable in March ended a tad lower at 149-151 paise from previous close of 149-1/2—151-1/2 paise.

The premium for far-forward contracts maturing in September finished slightly better at 294-296 paise from 293-295 paise.

The RBI has fixed the reference rate for the US dollar at 53.1198 and for euro at 68.6020.

The rupee declined further against the pound sterling to 85.15 from last Friday’s close of 84.89 and also declined to 68.76 per euro from 68.53.

It also eased further against the Japanese yen to 67.38 per 100 yen from last close of 67.35.

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