Rupee retreats from 3-week high ahead of Budget

The currency slid 8 paise to end at 61.83

Retreating from three-week highs, the Indian rupee today slid 8 paise to end at 61.83 on month-end dollar from importers and some banks ahead of Union Budget.

The rupee resumed lower at 61.85 per dollar as against the yesterday's closing level of 61.75 per dollar at the Interbank Foreign Exchange (Forex) Market. It dropped further to 61.91 per dollar on good dollar demand from importers.

However, the domestic currency recovered to 61.75 on selling of dollars by banks and exporters in view of strong foreign capital inflows in view of firm equity market before finishing at 61.83 per dollar, showing a loss of 8 paise or 0.13 per cent.

The local currency had gained by 56 paise or 0.90 per cent in the previous three days and closed at levels last seen on February 6.

"Rupee depreciated marginally due to rise in dollar value against other currencies overseas. Sporadic dollar purchases by importers amid talks of RBI presence also weakened the rupee," said Admisi Forex, Director, Suresh Nair.

Ahead of Modi government's first full Budget, the benchmark Sensex today logged its best daily gain in almost six weeks, spurting 473 points to regain 29000 level after Economic Survey made a strong pitch for big-bang reforms while projecting faster growth and improved fiscal situation.

The rupee has been moving in a reverse direction to local equities recenly. While rupee fell by eight paise today, the Sensex jumped by over 473 points. Yesterday, the rupee had jumped by 22 paise even as Sensex fell 261 points.

Month-end dollar demand from importers, mainly oil firms, affected rupee value against the dollar, say forex dealers.

Globally, the dollar index was down by 0.26 per cent against a basket of its major global rivals.

The dollar was lower against the yen and the euro in Asian trade today, with the greenback unable to extend overnight gains triggered by strengthening hopes for higher US interest rates.