Bouts of month-end dollar demand from banks and importers hit the rupee
Breaking its two-day winning run, the rupee today tumbled by 32 paise to close at 68.06 against the US currency on month-end dollar demand from importers and banks amid persistent foreign capital outflows.
However, equities bucked the forex market trend, with the Sensex rebounding 406 points to end above the 26,000-mark after Finance Minister Arun Jaitley underlined the need to have globally compatible tax rates to broad-base the economy.
The rupee opened lower at 67.84 per dollar as against yesterday's closing level of 67.74 at the Interbank Foreign Exchange (Forex) Market and dropped further to 68.07 before ending at 68.06, showing a loss of 32 paise or 0.47 per cent.
The rupee had gained by 25 paise, or 0.37 per cent, in previous two trading days.
The domestic unit hovered between 67.8150 per dollar and 68.07 per dollar the day.
In the overseas market, the dollar index, which tracks the greenback against a basket of six global peers, added 0.06 per cent to 103.04 in the late afternoon trade.
The dollar inched up against yen and euro today as some investors emerged out of the holiday lull to hunt for bargains as the market entered the last trading stretch of the year.
The dollar gained slightly today as speculation of stronger US growth and higher interest rates continued to support the US currency.
Many market participants are awaiting tangible, effective economic policies from the Trump administration starting next year before pushing up the dollar further.
Meanwhile, the RBI today fixed the reference rate for the dollar at 67.9967 and euro at 71.0498.
In cross-currency trades, the rupee fell against the pound sterling to settle at 83.43 from 83.19 yesterday and also dropped against the euro to finish at 71.12 from 70.81.
The domestic unit also declined against the Japanese yen to close at 58.02 from 57.86 per 100 yens.
In the forward market, premium for dollar fell due to fresh receiving from exporters.
The benchmark six-month premium for May declined to 128-130 paise from 133.5-135.5 paise and the far-forward November 2017 contract also eased to 274.5-276.5 paise from 280-281 paise yesterday.
Meanwhile, the benchmark Sensex rose by 406.34, or 1.57 per cent, to close at 26,213.44.
Illustration: Uttam Ghosh/Rediff.com
