Rupee snaps 4-session rally, ends 3 paise down at 61.30

Dollar demand from oil importers amid weakness in local equities weighed on the currency

The Indian rupee today snapped a four-session rally and softened by three paise to end at 61.30 against the Greenback on dollar demand from oil importers amid weakness in local equities.

A better dollar overseas ahead of two-day monetary policy meeting of the US Federal Reserve starting tomorrow and slowing capital inflows also weighed negatively on the market.

At the Interbank Foreign Exchange (Forex) market, the domestic currency resumed strong at 61.19 a dollar from last Wednesday's close of 61.27 and immediately touched a high of 61.18 following initial rally in local stocks.

Later, it met with strong resistance in line with fall in domestic equities amid fresh month-end dollar demand from importers, mainly oil refiners, to day's low of 61.36 before settling at 61.30, a fall of three paise or 0.05%.

In the previous four trading sessions, the rupee had risen by 56 paise or 0.91%. The Forex market was closed on October 23 and 24 on account of holidays.

The Indian benchmark S&P BSE Sensex, which was up by nearly 144 points in early stages, fell back and closed down by 98.15 points or 0.37%. FPIs/FIIs sold shares worth Rs 12.38 crore last Thursday as per provisional data.

The dollar index was up by a marginal 0.03% against its six major global rivals.

Pramit Brahmbhatt, CEO, Veracity Group, said: "Today Rupee opened on a strong note taking cues from local equities. As the day progressed, rupee lost its way and closed in red due to month end dollar buying pressure from oil marketing companies. The trading range for the Spot USD/INR pair is expected to be within 60.80 to 61.80."

We believe that the Rupee could remain weak as importers could continue to purchase Dollars for the month-end payments for defense and oil imports, said Suresh Nair, Director, Admisi Forex India Pvt Ltd.