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Mumbai, Sept. 2

The rupee fell by 25 paise against the greenback on Tuesday due to huge demand for dollar from foreign banks and oil companies. The rupee’s movement was in the range of 40 paise indicating high volatility, said forex dealers. The currency opened at 44.20/21 and weakened to touch an intra-day low 44.57/58. It then staged a recovery to touch an intra day high of 44.15/16 before depreciating to close at 44.43/44, against the previous close of 44.18/19.

Despite a rumoured intervention by the Reserve Bank of India to arrest the rupee’s slide, the currency fell as there was a huge FII outflow, said a dealer with a private bank. With oil prices falling to $108 per barrel, oil companies were seen buying dollars. Also, foreign banks bought the greenback in the spot market and sold in the one-month non-deliverable forward market to make arbitrage profits, added the dealer.

In the forward market, the 6-month premium closed lower at 2.27 per cent (2.84) and the 12-month ended at 2.27 per cent (2.58). –

Our Bureau

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