Forex Update: Rupee closes 28 paise down at 63.51 on dollar demand

Month-end dollar demand from importers amid consistent selling by foreign funds in equities and bearish local equiries put pressure on the rupee and it depreciated for the second day in a row by 28 paise to close at 63.51 against the Greenback.

However, sluggish dollar overseas tried to cap the rupee fall but failed, a forex dealer said.

At the Interbank Foreign Exchange (Forex) market, the domestic unit commences lower at 63.43 a dollar from previous close of 63.28, but tried to recover to log a high of 63.3775.

Later, dollar demand from importers, mainly oil refiners, to meet their month-end requirements weighed on the rupee and it fell back to a low of 63.56 before concluding at 63.51, a net fall of 28 paise or 0.36%.

Fall in domestic stocks and sustained capital outflows too later impacted negatively on the rupee.

The benchmark S&P Bombay Stock Exchange (BSE) Sensex on Wednesday plunged by 298 points or 1.08% while FPIs pulled out $64.02 million on Tuesday, as per Sebi data.

The dollar index was down by 0.14 % against its major global rivals.

Mr. Pramit Brahmbhatt, Veracity Group CEO said the rupee closed at 63.51 against the dollar "taking cues from the dollar demand from oil companies and also the dollar index is trading multi year high, further forcing the Rupee to trade low. To make the things worse local indices also traded weak for the day which kept rupee under pressure. The trading range for the Spot rupee is expected to be within 63.20 to 63.80."

In the rupee forward market, premia declined on receivings by exporters.

The benchmark six-month premium payable in May declined to 192.75-194.5 paise from 196-198 paise previously.

Forward contracts maturing in November 2015 also slipped to 399.5-401.5 paise from 404-406 paise.

The Reserve Bank of India fixed the reference rate for dollar at 63.4614 and for euro at 77.3087.

The rupee fell back against the pound to 98.72 from overnight close of 98.48 and also turned negative to end at 77.44 per euro from Rs 77.37.

It, too softened to 52.73 per 100 Japanese yen from 52.69.