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Rediff.com  » Business » Rupee tumbles by 33 paise

Rupee tumbles by 33 paise

Last updated on: December 07, 2012 18:45 IST

RupeeThe rupee on Friday fell from its one-month high level by losing a sharp by 33 paise to end the day 54.47 against the US currency due to a firm dollar overseas, even as the government won the FDI vote in Rajya Sabha.

The local unit resumed lower at 54.25 a dollar against last close of 54.14 at the Interbank Foreign Exchange market but immediately touched a high of 54.09 on initial dollar selling by exporters and persistent capital inflows.

However, it later turned negative and logged a low of 54.57 before closing at 54.47, a fall of 33 paise, or 0.61 per cent, from its previous close.

Forex dealers said fresh dollar demand from importers also weighed on the rupee sentiment, while sustained foreign fund inflows into local stocks capped its fall to some extent.

Foreign institutional investors pumped in $118.9 million on Friday, according to the provisional data available on bourses.

Meanwhile, the BSE benchmark Sensex today declined by 62.70 points to 19,424.10.

The rupee had hit one-month high of 54.14 against the dollar on Thursday, after BSP chief Mayawati decided to lend her party's support to the government on allowing foreign direct investment in the multi-brand retail segment.

In the last three sessions, the local unit had gained 63 paise against the dollar.

"The rupee's weakness was mainly on account of a strong recovery in the dollar index after US economy posted a better than expected data.

"During the day, the rupee appreciated slightly after the Indian government won retail FDI vote in Rajya Sabha.

However, this appreciation was temporary as the news was already priced in," India Forex Advisors Founder and CEO Abhishek Goenka said.

Pramit Brahmbhatt, CEO, Alpari Financial Services (India) said: "The rupee erased the most of yesterday's gains after the dollar index advanced sharply on weaker Euro due to stark warning issued by Bundesbank to Germany over growth prospects, he added.

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