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The rupee fell for the seventh session in a row today closing down by 5 paise at an 11-week low against the dollar as strong demand for the US currency washed out early gains, despite smart recovery in stock markets.
At the Interbank Foreign Exchange (Forex) market, the rupee ended at 45.25/26, a loss of 5 paise over last close.
The domestic currency opened strong at 45.01/02 a dollar and touched a high of 44.95 on strong jump in equities.
However, sustained dollar demand from importers, mainly oil refiners, in the later part of the day weighed on the sentiment and the rupee fell back to a low of 45.29 before closing at 45.25/26, dealers said.
The BSE Sensex jumped by 273 points to regain the 17,000 mark as investors picked up equities globally at bargain levels after the US Fed decided to keep interest rates at all time low to check economic dip.
“The rupee was not able to sustain initial gains on account of crashing premiums in the forward market. Steep fall in the premiums was on account of demand for dollar to make oil payments to Iran. India owes about USD 4 billion to Iran for its crude oil imports from the former,” India Forex Advisors CEO Mr Abhishek Goenka said.
The rupee premium for the forward dollar crashed further on sustained receivings by exporters. The benchmark six-month forward dollar premium payable in January tumbled to 52-56 paise from Tuesday’s close of 82-1/2-84-1/2 paise.
Far-forward contracts maturing in July also slumped to 118-122 paise from 152-154 paise previously. However, the positive equities supported the rupee.
Markets all over the world entered in green after Fed governor Ben Bernanke gave a statement that they are not going to hike the key interest rates ‘at least’ till mid 2013,” he added.
The dollar index remained weak against a basket of currencies, while the New York crude oil was trading above $82 a barrel in European market today.
The RBI fixed the reference rate for the dollar at Rs 45.2058 and the euro at Rs 64.7633.
The rupee recovered against the pound sterling to settle at Rs 73.51/53 from Tuesday’s close of Rs 73.92/94 while remained weak at Rs 64.94/86 per euro from Rs 64.50/52.
It dipped against the Japanese yen to Rs 59.12/14 per 100 yen from last close of Rs 58.65/67
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