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Despite FII inflows, rupee dips 27p to 61.50 vs $ on importer demand

The rupee's decline was limited by a rally in local stocks, which took the key Sensex index to a new closing high, and continued foreign fund inflows.

It was the second month of gains for the rupee, which rose 1.8 per cent in October after appreciating 4.7 per cent in September. The Indian currency has recovered considerably since dropping to all-time low of 68.85 on August 28.

The rupee opened lower at 61.37 a dollar on the interbank foreign exchange market from the previous close of 61.23 and touched the day's high of 61.29. Later, it dropped to 61.56 before settling at 61.50, a fall of 27 paise or 0.44 per cent.

In the past two days, the rupee had risen 29 paise to the highest level in more than two weeks.
Month-end buying of greenbacks from importers, mainly oil refiners, weighed on the rupee.

The dollar index was up 0.26 per cent against major global rivals after the Federal Reserve on Wednesday held its monetary policy steady, in line with expectations.

‘The rupee was seen weakening after the Fed announced that they will continue with the current pace of QE (quantitative easing) but gave a slight hint that they may taper in the month of December. This fuelled gains in the dollar and made the rupee depreciate,’ said Abhishek Goenka, CEO of India Forex Advisors. ‘The Fed chairman said that they want to see some more data before making changes to the current QE program.’
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