Mumbai, Aug 11: The rupee today weakened by 16 paise to close at a five-and-a-half month low against the US currency due to sustained dollar demand from importers and weak stocks.
Extending losses for the eighth session in a row, the rupee ended lower by 16 paise at 45.41/42, a level not seen since February 24, 2011, when it had finished at 45.48/49. In eight days, the rupee lost 134 paise, or 3.04 per cent.
Importers, mainly oil refiners, bought dollar in view of falling oil prices in overseas market, dealers said. New York crude oil was trading at USD 82 a barrel today.
At the Interbank Foreign Exchange (Forex) market, the rupee opened lower at 45.30/31 a dollar from yesterday's close of 45.25/26 and immediately it touched a low of 45.50 due to weakness in stocks.
However, it recovered to a high of 45.20 in afternoon trade in line with smart rebound in equities when the Sensex was trading in positive zone.
Later, it fell back to settle at 45.41/42 a dollar, as the Bombay Stock Exchange benchmark Sensex again tumbled 71 points to close 0.42 per cent down.
Alpari Financial Services (India) CEO Pramit Brahmbhatt said, “The rupee witnessed a volatile trade as it moved 30 paise throughout the day following the choppy local shares.”
India Forex Advisors CEO Abhishek Goenka said, “The rupee continues to decline today on account of sharp decline in forwards market, dollar demand from oil companies for pending Iran oil payment and weaker Asian peers.”
The dollar index was trading barely stable with downward bias against its major rivals in European market today.
“One year Forwards fell as dollar shortage in the cash market prompted investors to do a “buy-sell swap” where traders bought spot dollars and sold forward dollars. One month offshore forward contract was quoting at 45.44-49,” Goenka added.
The rupee premium for the forward dollar remained weak on sustained receivings by exporters. The benchmark six-month forward dollar premium payable in January moved down to 46-50 paise from Wednesday's close of 52-56 paise.
Far-forward contracts maturing in July also declined to 105-110 paise from 118-122 paise previously. The RBI fixed the reference rate for the dollar at Rs 45.2713 and the euro at Rs 64.5821.
The rupee improved further against the pound sterling to end at Rs 73.33/35 from yesterday's close of Rs 73.51/53 while recovered to Rs 64.31/33 per euro from Rs 64.94/86 previously.
It, however, declined further against the Japanese yen to Rs 59.28/30 per 100 yen from last close of Rs 59.12/14. PTI