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Rupee Falls to One-Month Low of 67.19 on Dollar Strength

Mumbai
Rupee Falls to One-Month Low of 67.19 on Dollar Strength
File-AP Photo/Rajesh Kumar Singh
Rupee Falls to One-Month Low of 67.19 on Dollar Strength
outlookindia.com
2016-08-22T18:48:26+0530

The rupee today lost 14 paise to close at fresh one-month low of 67.19 against the US currency on increased dollar demand from importers and banks amid weak equity markets.

The US dollar was firm against global currencies in overseas markets on rising prospects for a rate hike by US Federal Bank, which hit the rupee sentiment, a dealer said.

Investors, too, turned cautious over the upcoming redemption of the FCNR-B deposits, even though RBI has reiterated its commitment to provide enough liquidity, another dealer said.

Stock markets ended in the negative with investors adopting cautious stance after the appointment of Urjit Patel as the next RBI chief, who is very unlikely to cut rates in view of high inflation.

The government last week announced the appointment of Urjit Patel as the next Reserve Bank Governor with effect from September 4.

Good capital inflows into equities and debt markets, however, restricted the rupee fall. Maintaining their bullish stance on the Indian markets, foreign investors have deployed over Rs 7,700 crore so far this month.

The rupee today resumed sharply lower at 67.20 a dollar as compared to last Friday's closing value of 67.05 at the Interbank Foreign Exchange (Forex) market here on bouts of dollar demand from importers and banks.

After trading in a narrow range throughout the session, the domestic unit drifted further to hit fresh intra-day low of 67.24 in late afternoon trade before ending at 67.19 -- a level not seen since July 26.

The domestic currency has lost 43 paise, or 0.64 per cent in three sessions to Monday.

RBI fixed the reference rate for the dollar at 67.1940 and for euro at 75.8083.

In cross-currency trades, the rupee remained under pressure against the pound sterling and settled at 88.08 from 87.97 and dropped further against the euro to finish at 75.96 as compared to 75.91 last weekend.

The domestic unit, however, rebounded against the Japanese yen to settle at 66.82 per 100 yens from 66.92 earlier.

The US dollar index, which measures the greenback's strength against a trade-weighted basket of six major currencies, was up 0.18 per cent at 94.64 in early trade.

In the forward market, premium for dollar remained weak due to consistent receivings from exporters.

The benchmark six-month premium for January inched down to 176-178 paise from 177-179 paise and forward July 2017 contract also eased to 375-377 paise against 376-378 paise last Friday.

Also, oil prices pulled back below the USD 50 a barrel as traders doubted upcoming producer talks would rein in oversupply.

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