Re weakens, touches Rs 40.81 a dollar in intra-day trade

The rupee fell to a low of Rs 40.81 per dollar in intra-day trade on concerns over slowing capital inflows following stringent curbs on overseas borrowings.

The rupee recovered part of the losses to close at Rs 40.53 per dollar as companies sold the US currency when it touched a 30-day high.

N S Paramsivam, head of forex and treasury at the Essar Group, said: "The rupee's appreciation beyond Rs 40 per dollar has been capped both due to the Reserve Bank's intervention and putting controls on the capital inflows, at least in the near term. In the next three to six months, the rupee is expected to fall to Rs 41-41.50 to a dollar."

A dealer with a foreign bank said the rupee decline took place because some companies that had parked their borrowings overseas were rushing to transfer the funds into India, fearing more restrictions by the RBI.