The Indian rupee today breached the the 63-mark intra day against the Greenback and ended with a sharp loss of 47 paise at 62.97 on sustained dollar demand from importers amid weakness in local shares.
It crossed the 63-level after two months as it hit a low of 63.0025 today. Previously, it had logged an intra-trade low of 63.20 on January 8, 2015.
Besides dollar demand and weakness in share market, a firm dollar overseas also put pressure on the rupee, traders said.
At the Interbank Foreign Exchange (Forex) market, the domestic unit commenced slightly lower at 62.52 a dollar from overnight close of 62.50 and touched a high of 62.43.
Later, it surrendered early gains and plunged to a low of 63.0025 before ending at 62.97 -- a fall of 47 paise or 0.75 per cent. Yesterday, it had gained 28 paise or 0.45 per cent.
On a weekly basis, the rupee has tumbled by 81 paise or 1.30 per cent.
The benchmark S&P BSE Sensex today reacted downwards by a whopping 427.11 points, or 1.48 per cent. Foreign Portfolio Investors (FPIs) picked up shares worth Rs 733.09 crore yesterday, as per provisional data.
Stocks saw massive selling after rise in retail inflation in February hit investors’ hopes of aggressive rate cuts.
The dollar index, a gauge of six major global rivals, was up by 0.30 per cent.
Pramit Brahmbhatt, Veracity Group, CEO said: “Rupee traded weak and depreciated almost fifty paise taking cues from weak local equities. Also, fresh buying of the dollar by exporters and banks further dented the rupee. The trading range for the spot rupee is expected to be within 62.50 to 63.50.”
Some have suggested that the RBI intervened in forex markets today.
“The Reserve Bank of India apparently bought dollars inthe spot market and may have picked up close to USD 800 million through intervention in the spot foreign exchange market today...weekly RBI reserves data will be released today evening,” said Suresh Nair, Director, Admisi Forex India.
Meanwhile, the forward premia finished lower. The benchmark six-month premium payable in August moved down to 222.5-224.5 paise from previous close of 224.5-226.5 paise while the forward contracts maturing in February 2016 fell back to 439-441 paise from 441.5-443.5 paise.
The Reserve Bank of India fixed the reference rate for dollar at 62.6733 and for Euro at 66.4212.
The rupee remained firm against the pound to 93.33 from 93.69 yesterday while fell back to 51.85 per 100 Japanese yen from 51.64. However, it declined further to 66.66 per euro from 66.41.