Rupee at 11-month low of 45.99; snaps two-day gains

Aug 24 2011, 19:12 IST
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SummaryThe dollar was so strong that even its weakness in the overseas market did not help rupee to gain strength.

The rupee on Wednesday lost 36 paise to close at an 11-month low of 45.99 against the dollar as importers, mainly oil refiners, rushed to buy the US currency amid continuing weak signs of fund outflows.

Dealers said heavy month-end dollar demand from importers to meet their monthly requirements put pressure on the rupee.The dollar was so strong that even its weakness in the overseas market did not help rupee to gain strength. Meanwhile, the BSE benchmark Sensex today tumbled by over 213 points following weak Asian markets which fell after Moody's downgraded Japan's sovereign debt rating.

"Looking at the strong dollar, one can expect rupee to trade over 46.00 levels and the trading range for the USD/INR will be 45.70 to 46.20 tomorrow," Alpari Financial Services (India) CEO Pramit Brahmbhatt said. The dollar index, consisting of six major currencies, was down by about 0.1 per cent, while New York crude oil was trading above $85 a barrel in the European market today. In a fairly active trade at the Interbank Foreign Exchange (Forex) market, the domestic currency opened lower at 45.70/72 a dollar from yesterday's close of 45.63/64.

Later, it dropped further in line with weakness in local stocks to a low of 46.04 before concluding at 45.99/46.00, showing a fall of 0.78 per cent, registering the biggest fall of 36 paise in last six months.

Foreign Institutional Investors pulled out Rs 100.34 crore yesterday from equities, as per provisional data.

India Forex Advisors CEO Abhishek Goenka said, "The one month offshore NDF is trading at 46.09 levels. The US dollar is expected to open above 46.00 levels tomorrow." The rupee premium for the forward dollar dropped on fresh receivings by exporters. The benchmark six-month forward dollar premium payable in January settled sharply lower at 65-68-1/2 paise from yesterday's level of 77-80 paise. Far-forward contracts maturing in July also plunged to end at 131-134 paise from 150-153 paise in the previous session.

The RBI fixed the reference rate for the dollar at Rs 45.7695 and the euro at Rs 65.9745. The rupee dipped against the pound sterling to end at Rs 75.73/75 from Tuesday's close of Rs 75.38/40 and remained weak to settle at Rs 66.40/42 per euro from Rs 66.08/10 yesterday. It also dipped further against the Japanese yen to Rs 60.11/13 per 100 yen from last close of Rs 59.64/66.

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