Millennium Post

Rs tumbles 10-month low against greenback

Taking a respite for a day, the rupee continued its south-bound journey on Tuesday, tumbling by 39 paise to register a 10-month closing low of 55.96 against the greenback following heavy dollar demand from importers amid better dollar overseas. A rally in local equities and renewed capital inflows failed to restrict the rupee fall, said a dealer.

At the Interbank Foreign Exchange (Forex) market, the domestic unit commenced weak at 55.68 a dollar and tried to recover to touch a high of 55.64. Later, it dropped to a low of 55.9950 on heavy dollar demand from importers, mainly oil refiners to meet their month-end requirements before concluding at 55.96, showing a fall of 39 paise (0.70 per cent).

During the day, the benchmark S&P BSE Sensex improved further by 130.05 points (0.65 per cent). The dollar index was up 0.06 per cent against a basket of six major currencies. 'The dollar index traded strong throughout the day which depreciated the rupee,' said Alpari Financial Services (India) CEO Pramit Brahmbhatt. Heavy demand for the greenback from gold and oil importers helped it to trade strong against the rupee, although the Indian currency's fall was capped by the domestic equity markets, which closed on a positive note.

The trading range for the spot $/ Re pair is expected to be within 55.75 to 56.25. Foreign institutional investors pumped in Rs 711.12 crore ($127 million) into local equities on Tuesday, according to provisional BSE data.

The premium for forward dollar recovered slightly on fresh stray payments from banks and corporates. The benchmark six-month forward dollar premium payable in October edged up to 145-147 paise from previous close of 144-1/2-146-1/2 paise and far-forward contracts maturing in April also rose to 304-1/2-306-1/2 paise from 302-1/2-304/1-2 paise.

The RBI fixed the reference rate for the US dollar at 55.7423 and for the euro at 72.0265. The rupee fell back against the pound sterling to 84.61 from the overnight close of 84.08 and also turned negative against the euro to end at 72.40 from 71.93. It, however, recovered against against the Japanese yen to 54.86 per 100 yen from 55.04.
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