Forex Update: Rupee closes 5 paise down against dollar at 61.88

The rupee weakened further by 5 paise to end at 61.88 against the Greenback on sustained demand for the American currency from importers amid a broader sell-off in equities.

Widening current account deficit (CAD) due to soaring gold imports mainly put pressure on Indian unit despite weak dollar overseas.

At the Interbank Foreign Exchange (Forex), the domestic unit commenced lower at 61.89 compared to overnight closing level of 61.83. It hovered in a wide range owing to volatile domestic stocks between 61.9175 and 61.8475 before concluding at 61.88, showing a loss of 5 paise, or 0.08 per cent.

"Robust capital inflows along with profit-taking in US currency after its recent rally some what cushioned the rupee sentiment," a forex dealer said.

Country's current account deficit (CAD) widened to $10.1 billion or 2.1 per cent of gross domestic product in the second quarter of this fiscal, up from 1.2 per cent a year-ago primarily led by a steep rise in gold imports.

Though the deficit concerns were lagely offset by buffering foreign capital inflows against the backdrop of plunging global oil and commodity prices.

Meanwhile, equities plummeted for the second straight day with both the indices - Sensex and Nifty sliding over 1 per cent to hit one-month low spooked by global financal markets rout and growth concerns.

Foreign portfolio investors bought shares worth a massive Rs 4,984.60 crore on Monday as per provisional data.

Benchmark Brent crude slipped to a five-year low, sliding below $66 a barrel on growing worries over a deepening supply glut.

The dollar index, which measures the Greenback against a basket of six major currencies, was down by 0.36 per cent.