Rupee logs biggest loss in 3 weeks

Increased demand for the dollar from importers also put pressure on the rupee.

The rupee fell 36 paise, its biggest loss in three weeks, to close at 62.20 versus the dollar today as pent up demand of the American currency and a drop in regional currencies weighed.

The local currency dropped on a day when the equity benchmark Sensex spurted by over 170 points.

At the Interbank Foreign Exchange (Forex) market, the rupee commenced lower at 62.02 a dollar from the previous close of 61.84. Later, it declined to a low of 62.31, before settling at 62.20, a fall of 36 paise or 0.58 per cent.

In the previous two sessions, rupee rose by 58 paise or 0.93 per cent. Today’s drop is the biggest since the 44-paise fall on January 27.

Regional currencies like the Yen slid to its weakest levels this month amid reports that Bank of Japan said it will continue monetary easing to meet its inflation target.

Some analysts suggested that rupee’s depreciation today was linked to fears that fiscal projections in interim budget may not be met.

FIIs had injected USD 83.91 million on Monday as per Sebi data.