Rupee at 6-wk low of 55.91, down 25 paise on heavy USD demand

 

A strong dollar overseas ahead of the ECB's meeting on interest rates slated for tomorrow also weighed on the rupee, forex dealers said.

At the Interbank Foreign Exchange (Forex) market, the domestic unit resumed lower at 55.75 a dollar from previous close of 55.66 and immediately touched a high of 55.74. It fell further to a low of 55.99 in the morning session itself.

The rupee remained range-bound throughout the day, before settling at 55.91, a fall of 25 paise or 0.45 per cent over yesterday. This was the lowest close for the domestic currency The rupee since 56.16 on July 25, 2012.

Dealers attributed the drop in rupee value to sustained dollar demand from importers, mainly oil refiners and weakness in domestic equities. The dollar index, a gauge of six major global currencies, was last up by 0.13 per cent.

Pramit Brahmbhatt, CEO, Alpari Financial Services (India) said," The rupee was sharply lower tracking rebound in dollar index after the cable currencies shed gains on fading hopes of bond buying announcements by ECB in its meet tomorrow."

"The deteriorating economic numbers from EU from the spending and sales then pinned up hopes of some action from ECB and BoE which supported global markets but the bias remained weak," he added.

The Indian stock market benchmark Sensex moved in negative terrain throughout the day and closed down by 127.53 points. (MORE)