Notwithstanding a partial recovery on lower-than-expected headline inflation, the rupee on Monday closed down by 10 paise at one-week low of Rs. 54.62 on sustained dollar demand from importers and capital outflows.
Forex dealers said the US currency gaining strength against rivals overseas also weighed down on the rupee sentiment. However, recovery in local equities cushioned the fall to some extent, they added.
The local currency commenced the day on a bearish note at Rs. 54.65 against the dollar from Friday’s close of Rs. 54.52 at the Interbank Foreign Exchange (Forex) market.
Later, it fell to a low of Rs. 54.79 before gaining some ground to Rs. 54.58 and finally closing at Rs. 54.62, down 10 paise, or 0.18 per cent, from its previous close.
This is the lowest level hit by the local currency since April 5, when it had fallen to 54.81 against the dollar.
Foreign institutional investors continued to remain bearish on domestic stocks and pulled out around $ 77 million (Rs 418.37 crore) from markets, according to BSE provisional data.
“The rupee was seen weakening against the US dollar tracking strength in the dollar index. However better than expected inflation numbers supported the rupee to some extent,” said Abhishek Goenka, Founder and CEO, India Forex Advisors.
The dollar index was up by 0.21 pct against a basket of six major rivals while New York crude oil futures was trading below $ 89 a barrel on Monday.
Pramit Brahmbhatt, CEO, Alpari Financial Services (India) said: “Rupee depreciated today but the fall was capped by the Indian shares which closed on positive ground after data showed wholesale price inflation at 5.96 per cent in March, lower than 6.84 per cent in February.”
Meanwhile, the BSE benchmark Sensex recovered by over 115 points to 18,357.80.
