Rupee ends above 68, hits 29-month low vs dollar

Hit by global economic woes, the rupee on Thursday extended its losses by seven paise to close above the 68-mark, a fresh 29-month low against the dollar, on sustained demand for the American currency from importers and banks amid fall in equities.

Persistent foreign capital outflows also affected the market sentiment, a forex dealer said. Foreign portfolio investors sold shares worth a net Rs 1,324.69 crore on Wednesday, according to provisional data issued by stock exchanges.

The domestic unit resumed higher at 67.88 per dollar as against Wednesday's closing level of 67.95 at the Interbank Foreign Exchange (Forex) market.

Later it fell to 68.11, before ending at 29-month low at 68.02 per dollar, showing a further loss of seven paise or 0.10 per cent. It had last ended at 68.80 per dollar on August 28, 2013. The domestic currency has lost 37 paise or 0.55 per cent in two days. The domestic unit hovered in a range of 68.11 and 67.8150 during the day. The dollar index was down by 0.02 per cent against a basket of six currencies in the late Asian trade.

Overseas, the dollar was higher against the major rivals in early Asian trade, breaking off from one-year low against the yen on Wednesday as crude oil prices bounced, while the euro awaited a policy decision from the European Central Bank for near-term cues. The benchmark BSE Sensex ended lower by 99.82 points or 0.41 per cent on Thursday.

Pramit Brahmbhatt, chief executive officer of Veracity Group, said, “Following volatile global equity market, the rupee traded with great volatility for the day, which opened on a positive note below 68 levels. But 'sell-off' in equity market forced the rupee to trade with negative bias.

Thus taking cues from domestic equity market, the rupee closed with a nominal loss of seven paisa at 68.02 levels. Trading range for spot dollar/rupee pair is expected to be within 67.6 to 68.2 levels. The rupee will continue to take cue from equity market.

In forward market, premium for dollar continued to decline on sustained receivings from exporters.

The benchmark six-month premium payable in June fell to 183-185 paise, from 188-190 paise on Wednesday and forward December 2016 contract also declined further to 391-393 paise from 398-400 on Wednesday.

The Reserve Bank of India fixed the reference rate for the dollar at 68.0600 and for the euro at 74.1650. In cross-currency trades, the rupee fell against the pound sterling to finish at 96.17, from 96.06, while it ended steady against euro at 74.16.

The domestic currency rose against the Japanese yen to settle at 58.17, from 58.29 per 100 yen on Wednesday.