Rupee snaps 2-day gains, down 8 paise

A strong dollar in overseas markets affected the currency

Snapping its two-day gaining streak, the rupee closed down by 8 paise at 61.75 per dollar on fresh demand for the US currency from banks amid fall in stock markets.

A strong dollar in overseas markets also affected the rupee value against the dollar, a forex dealer said.

The rupee opened steady at 61.67 per dollar at the Interbank Foreign Exchange Market and firmed up to 61.56 per dollar on initial selling of dollars following overnight weakness of dollar in the US market.

However, the domestic currency dropped to 61.8550 per dollar on fresh demand from banks and importers before ending at 61.75 per dollar, showing a loss of 8 paise, or 0.13 per cent. It had gained 19 paise or 0.31 per cent in the last two days.

In the Asian market, the dollar was higher against the yen and the euro in afternoon trade as diminished worries over the Greek debt situation and a recovery in oil prices strengthened risk sentiment.

Meanwhile, the benchmark BSE Sensex dropped further by 117.03 points or 0.40 per cent to end at 28,883.11. Foreign portfolio investors sold shares worth Rs 264.35 crore yesterday, as per provisional data.

The forward premia firmed up further on sustained paying pressure from corporates.

The benchmark six-month premium payable in July ended higher at 224-226 paise from 222.5-224.5 paise yesterday and forward contracts maturing in January 2016 also rose to 431.5 -433.5 from 428-430 paise.

The Reserve Bank of India fixed the reference rate for dollar at 61.6800 and for Euro at 70.7470.

The rupee dropped further against the pound to 93.79 per pound from 92.89 per pound previously and fell against the euro to 70.64 per euro from 69.99.

It also ended lower against the yen to 52.57 per 100 yen from 52.51 yesterday.