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The rupee on Tuesday recovered from near-53 levels but still ended down by 18 paise at 52.68/69 due to sustained dollar demand from banks despite firm domestic stock markets.
At the Interbank Foreign Exchange (Forex) market, the rupee resumed lower at 52.66/67 per dollar against the last closing level of 52.50/51 per dollar.
The domestic currency fell further to the day’s low of 52.90 due to sustained dollar demand and weak equity markets.
However, a recovery in stock markets and a weak dollar overseas helped the rupee to recoup the losses to some extent.
Persistent dollar demand from banks and importers mainly affected the rupee value against dollar, a dealer said.
“Rupee is trading at three-and-a-half months low against US dollar on account of India’s weak economic fundamentals, widening trade deficit and possible speculative dollar buying,” Mr Abhishek Goenka, India Forex Advisors CEO said.
“Other major reasons behind weakening of rupee are increasing oil demand and global uncertainty,” he said.
In Sydney market, the dollar lost ground against most rivals in Asian trading hours in early trade, ahead of the start of a two-day policy meeting of the US Federal Reserve.
In London, the euro edged higher against the dollar.
Meanwhile, the BSE benchmark Sensex recovered by 111 points of 0.65 per cent.
Global crude oil prices have surged since the beginning of 2012 on account of geo—political concerns in the West Asia and abundant global liquidity.
The dollar index was down by 0.10 per cent in European market today while New York crude oil was trading above USD 103.20 a barrel.
The rupee premium for the forward dollar finished higher on sustained paying pressure from banks and corporates.
The benchmark six-month forward dollar premium payable in September ended up at 163-165 paise from Monday’s level of 161-163 paise and far-forward contracts maturing in March also closed higher at 304-306 paise from 301-303 paise.
The RBI fixed the reference rate for the US dollar at 52.7910 and for euro at 69.5325.
The rupee continued to rule weak at 85.12/14 against the pound sterling from yesterday’s close of 84.48/50 and dropped further against the euro to 69.40/42 from 68.96/98 previously.
It, also remained weak against the Japanese yen to 64.92/94 per 100 yen from last close of 64.77/79
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