Rupee down 12 paise at 55.77 a dollar, touches 56.07

Decline partly triggered by dollar becoming stronger against other global currencies in overseas forex markets

Despite RBI steps to check the decline of rupee against the US dollar, the domestic currency dropped 12 paise to 55.77 against the American currency in late morning trade today on fresh dollar demand from banks and corporates.

The rupee's decline was also partly triggered by dollar becoming stronger against other global currencies in the overseas forex markets.

The Reserve Bank's intervention and its indicating yesterday that it may sell dollars directly to oil companies have capped the losses.

The rupee resumed lower at 56 per dollar as against yesterday's close of 55.65 and dropped further to 56.07 before quoting at 55.77 per dollar at 1015hrs.

After plunging to a new low of 56.38, the rupee had staged a smart recovery yesterday to close at 55.64 against the dollar to snap the three-day string of losses as RBI intervention saw increased dollar selling by banks amid Indian stocks making gains.

Forex dealers said that besides dollar's gains in the overseas markets on persistent eurozone worries, weak opening in the stock markets today also put pressure on the local unit. The BSE 30-scrip benchmark Sensex declined by 87 points or 0.54% at 1015hrs, from yesterday's close of 16,222.30.

In New York, the dollar gained against the euro yesterday, pushing it to 22-month low, in a volatile session.