Rupee drops 13 paise to 67.20 vs US dollar

The rupee today depreciated by 13 paise to end at 67.20 against the American currency owing to sustained dollar demand from banks and importers.
Sluggish local equities even put more pressure on the domestic unit despite weak dollar overseas.
Trading sentiment was by and large tepid as traders refrained from taking any fresh positions and anxiously awaiting the announcement of the next RBI governor, a forex dealer commented.
The domestic currency opened substantially lower at 67.15 a dollar against last Friday's closing value of 67.07 at the Interbank Foreign Exchange (Forex) market here due to increased demand for the American unit.

But it reversed most of its initial losses in late morning deal and rebounded smartly to hit a fresh intra-day high of 67.0525 following fresh dollar selling by exporters.
However, the recovery proved short-lived in absence of any positive economic indicators and witnessed a sharp reversal in afternoon session to touch a low of 67.21 before ending at 67.20, revealing a loss of 13 paise, or 0.19 per cent.

The rupee had dropped 16 paise to 67.07 on last Friday.
Meanwhile, RBI Governor Raghuram Rajan today said the current level of the rupee is "pretty reasonable" and any attempt to devalue it may lead to a surge in inflationary pressures and "offset any benefits".

He also said that India has to go a long way to reach the per capita GDP level of China and needs many more years of sustainable strong growth.
The RBI fixed the reference rate for the dollar at 67.1015 and euro at 74.1673.
In cross-currency trades, the rupee rebounded sharply against the pound sterling to finish at 89.06 compared to 89.51 last weekend and also firmed up against the euro to end at 74.28 from 74.65.
The flagship BSE Sensex shot up by a whopping 521 points
to end at 28,050.88, while broader Nifty surged over 156 points to close at 8,677.90.

In the meantime, Foreign portfolio investors (FPIs) remained net sellers in the domestic equity markets and sold a net Rs 456.64 crore on yesterday as per provisional data.
In the forward market, premium for dollar maintained its downtrend due to consistent receiving by exporters.
The benchmark six-month premium for March dropped to 160-162 paise from 164.5-166.5 paise and the forward-September 2017 contract also fell to 336-338 paise from 342-344 paise.
Crude prices extended its fall for the second day following Iran's indication to boost its overall oil output to 4M bpd this year.
Opec agreed last month to work to try and reduce supply to raise a price that has halved in the past two years.

Brent crude oil was trading just below USD 52 a barrel on Tuesday, close to its highest this year.