The rupee on Monday fell for the first time in three days to end 13 paise lower at 59.52 as fag-end demand of the US dollar from some banks and importers washed out the early gains on account of strong local stocks.
At the Interbank Foreign Exchange market, rupee commenced lower at 59.46 a dollar from previous close of 59.39.
It recovered later to a high of 58.9650 on sustained dollar selling by exporters and strong rally in stock markets.
The rebound, however, was short-lived as fresh dollar demand from importers, mainly oil refiners, and some banks dragged down the rupee to a low of 59.54.
It finally ended at 59.52, a fall of 13 paise or 0.22 per cent.
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Rupee closes in the red, 1st time in 3 days
Photographs: Fayaz Kabli/Reuters
Attributing the rupee fall in the latter half to dollar demand ‘by the local industry to repay their debt liabilities’, Abhishek Goenka, Founder & CEO, India Forex Advisors said the currency could find support as government plans to unveil reform measures.
In the previous two days, rupee had spurted by 133 paise or 2.19 per cent amid signs of capital inflows and moderation in March quarter current account deficit.
Meanwhile, Finance Minister P Chidambaram on Monday in an interview to PTI said, ‘sentiment will turn in favour’ of the rupee as government is ‘committed to containing the fiscal deficit’ within target and is addressing how to finance CAD.
Rupee has lost over 10 per cent in last three months on fears of capital outflows after US Fed hinted it may scale down its monetary stimulus from later this year.
Experts see the short-term trading range for the spot USD/INR pair to be within 58.90 to 59.60.
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