Rupee drops 11 paise in late morning trade

The rupee dropped 11 paise to 62.42 against the dollar on Tuesday on demand for the U.S. currency from banks and importers amid subdued local stocks.

The rupee resumed lower at 62.40 per dollar compared with the previous close of 62.31 at the interbank foreign exchange market. It hovered in a range of 62.43 to 62.34 and was quoted at 62.42 per dollar at 10.45 a.m.

Banks and importers sought to increase their dollar positions, a forex dealer said. Capital outflows from foreign funds also affected market sentiment as foreign institutional investors sold shares worth a net Rs. 318.91 crore on Monday.

In New York, the dollar fell against other major currencies yesterday after a December reading on the U.S. services sector came in below market expectations.