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The rupee dropped further by 60 paise to end the week at 45.34/35 against the American currency on persistent dollar demand from banks and importers, mainly oil refiners, amidst weak local equity markets.
The rupee resumed lower at 44.90/91 a dollar at the Interbank Foreign Exchange (Forex) market as against the last weekend’s level of 44.74/75 and dropped further to 45.50 a dollar before ending the week at 45.34/35 a dollar, a loss of 1.34 per cent.
Capital outflows from foreign funds in view of weak equity markets also affected the rupee value against the dollar, a forex dealer said.
The persistent dollar demand from the local oil refiners in order to pay their dues to Iranian oil companies enhanced the strength in dollar. A better than expected IIP data of 8.8 per cent year on year for the month of June could not hinder the rupee’s decline.
The benchmark BSE Sensex closed down by a whopping over 466 points, affecting the rupee.
Mr. Abhishek Goenka, CEO, India Forex Advisors said, “the current drastic depreciation in the rupee and premiums is momentary and the situation is expected to change as soon as the dollar obligation to Iran is settled completely.”
The Reserve Bank of India (RBI) fixed the reference rate for US dollar and euro at Rs 45.3740 and Rs 64.3660 from last weekend’s close of Rs 44.8030 and Rs 63.1110 respectively.
The rupee premium for the forward dollar dropped sharply heavy receivings by exporters. The benchmark six-month forward dollar premium payable in January tumbled to 62-67 paise from last weekend’s close of 108-1/2-110-1/2 paise. Far-forward contracts maturing in July also finished distinctly weak at 130-135 paise from 218-1/2-219-1/2 paise last weekend.
The rupee remained weak against the Pound Sterling to end the week at Rs 73.46/73.76 from last weekend’s close of Rs 72.87/89 and also declined further to Rs 64.66/68 per euro from Rs 63.33/35 last weekend.
It too dropped against the Japanese yen to Rs 59.15/17 per 100 yen from preceding weekend’s level of Rs 56.98/51.00.
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