Rupee slips 25 p to 53.72 on heavy dollar demand from oil cos

At the Interbank Foreign Exchange (Forex) market, the domestic unit opened better at 53.40 a dollar from overnight close of 53.47. It immediately touched a high of 53.34 on initial rise in local stocks but the gains vanished quickly.

Dollar demand from importers, mainly oil refiners, to meet month-end dollar needs weighed on the rupee, said forex dealers.

Though FIIs pumped in around USD 47 million in stocks today, the rupee failed to recover due to overwhelming dollar demand from oil importers as Brent North Sea crude for delivery in December fell to $109.21 a barrel.

The rupee fell back to a low of 53.84, before concluding better at 53.72 -- a fall of 25 paise or 0.46 per cent.

Dealers said the rupee faced pressure as dollar gained strength in the overseas markets. The dollar index was up by 0.31 per cent on weakness in global stocks on reports that credit ratings of five Spanish regions have been downgraded.

"Rupee was seen weakening on account of a recovery in the dollar index and a drop in the Euro. The Euro fell below USD 1.30 whereas Dollar index approached the 80-level.

"After opening on a strong note, rupee could not sustain the appreciation for long and closed on a weaker note," said Abhishek Goenka, Founder & CEO, India Forex Advisors.

Yesterday, rupee had gained 37 paise or 0.68 per cent on the back of dollar selling coupled with good FII inflows.

Meanwhile, the Indian stock market benchmark Sensex today closed 83.42 points lower. (MORE)