The rupee today depreciated sharply by 44 paise to close at a seven-week low of 45.24/25 against the US currency following sustained dollar demand from importers amid stronger dollar overseas.
Fresh capital outflows too weighed on the rupee. Foreign Institutional Investors (FIIs) slowed down their purchases and sold shares to the tune of $153 million on November 12, as per SEBI data. FIIs pumped in a record $28.53 billion in 2010 so far, mainly supporting the rupee recently.
In a fairly active trade at the Interbank Foreign Exchange (Forex) market, the domestic unit opened sligtly weak at 45.85/86 a dollar from last Friday's close of 45.80/81.
It remained in the negative terrain throughout the day and ended at 45.24/25, a fall of 0.98 per cent.
The rupee was under pressure since the onset of business also due to some hesistancy in local equities at early stages. Late recovery, however, could not able to support the rupee.
The BSE benchmark Sensex today ended higher by 152.80 points or 0.76 per cent after pulling out a massive 775.59 points or 3.71 per cent in last three trading sessions.
Continued dollar demand from importers on the back of firm dollar overseas also kept the rupee under pressure. The dollar index of six major currencies was up by 0.36 per cent in European markets.
Nervousness over the possibility of monetary tightening by China to calm down the overheating economy aided the dollar rise overseas.
Global crude oil was trading above $85 a barrel in London today.
The rupee premium for the forward dollar ended further lower on sustained receivings by exporters. The benchmark six-month forward dollar premium payable in April dropped to 121-123 paise from 128-1/2/130-1/2 paise last weekend and far-forward contracts maturing in October too finished sharply weak at 214-216 paise from 229-231 paise previously.
The Reserve Bank of India has fixed the reference rate for the dollar at Rs 45.14 and the euro at Rs 61.74.
In cross-currency trade, the domestic currency remained weak against the pound sterling, the Japanese yen and the euro.
The rupee plunged to Rs 72.69/71 against the pound sterling from last Friday's close of Rs 71.83/85 and also declined to Rs 61.61/63 per euro from Rs 61.33/35 previously.
It too softened against the yen to Rs 54.53/55 per 100 yen from its last close of Rs 54.45/47.
