The rupee depreciated by six paise to 62.47 against the dollar today amid weak local equities and sustained demand for the US currency to post its fourth weekly decline.
The rupee, which ended at an almost six-week low, failed to get direction from the dollar index, which was up 0.02 per cent against a basket of major global rivals ahead of US jobs data. However, sustained capital inflows limited the rupee's fall, a forex dealer said.
The local currency opened lower at 62.65 a dollar from the previous close of 62.41 and dropped to 62.75 as domestic stocks fell for the fourth day amid heavy dollar demand from importers.
The rupee recovered to 62.46 on late dollar sales by exporters and continued foreign fund inflows in equities. It closed at 62.47, a drop of six paise or 0.10 per cent. In the past three days, it had plunged 85 paise or 1.38 per cent.
Economic Affairs Secretary Arvind Mayaram said yesterday weakness in the rupee was because oil marketing companies (OMCs) had shifted part of their dollar purchases to the open market from an RBI forex swap window. He said the rupee would stabilise in one or two days on strong inflows of foreign currency deposits from non-residents and export realisations.
"Negative stock markets and dollar demand from OMCs which have started returning to the market kept the rupee under pressure. On the global front, strong GDP growth posted by the US helped the US dollar index to move to its six-week high, which led to weakness in Asian currencies," said Abhishek Goenka, CEO of India Forex Advisors.
The 30-share benchmark Sensex today dipped 156.62 points. Overseas investors picked up shares worth Rs 479.24 crore yesterday, according to provisional stock exchange data.
"Rupee has depreciated for the fourth week in a row and is expected to depreciate further in coming days due to the country's external deficit and the impact of a possible tapering in the US Federal Reserve stimulus programme," said Pramit Brahmbhatt, CEO of Alpari Financial Services (India).
