Rupee depreciates further by 12 paise on weak local stocks

Persistent capital outflows put pressure on the currency

The rupee depreciated for the second day today closing down by 12 paise at 63.42 against the US currency due to month-end dollar demand from importers and fall in stocks markets.

Persistent capital outflows too put pressure on the rupee, a dealer said.

"Rupee continued to trade low for the second consecutive day taking cues from month-end dollar demand from oil importers and weak local equities which has already corrected more than 7 per cent due to weak corporate earnings and concern over taxes," Veracity Group CEO Pramit Brahmbhatt said.

At the Interbank Foreign Exchange (Forex) market, the domestic unit commenced sharply lower at 63.52 a dollar from previous close of 63.30 and dropped further to a low of 63.7250 during the day.

Later, it recovered to a high of 63.38 before finishing at 63.42, revealing a fall of 12 paise or 0.19 per cent.

Yesterday, it closed down by 15 paise or 0.24 per cent.

"The trading range for the Spot USD/INR pair is expected to be within 63.10 to 63.80," Brahmbhatt said.

The benchmark BSE Sensex today plunged by 214.62 points. Foreign Institutional Investors (FPIs) sold shares worth USD 119.12 million yesterday, taking a total to USD 610.63 million during the first three days of the week, as per Sebi data.

On weekly basis, it snapped two-week of losing string and concluded the truncated week with a gain of 14 paise or 0.22 per cent.

The Forex market will remain closed tomorrow, May 1, 2015, on account of 'Maharashtra Day'.