The rupee opened at 52.16 and soon fell to a low of 52.72 driven by a strong overseas demand for the dollar from domestic importers, particularly oil companies. On Monday, the rupee had closed at 52.16.
The country’s widening trade deficit coupled with flight of foreign capital to safe haven currencies such as the dollar are negative factors for the domestic currency. The RBI’s unwillingness to intervene in the market to prevent the rupee’s downward spiral is also putting pressure on the rupee, said dealers.
At 10.30 a.m. the rupee was at 52.61.