Fresh dollar demand from from importers, mainly from oil refiners after a strong US currency in overseas weighed on the rupee, even as RBI had announced a series of measures yesterday to prop up the domestic unit, a dealer said.
At the Interbank Foreign Exchange (Forex) market, the rupee had touched a high of 53.39 in early trade. However, weakness in local stocks pulled it down to a low of 53.70 before closing at 53.63 per dollar, a fall of 21 paise over the last close. Yesterday, it had gained 42 paise.
T S Srinivasan, GM (Treasury) of Indian Overseas Bank said, "The fundamentals continue to be weak to give any support to the rupee. The IIP numbers, that came out today, are again disappointing. So I feel, rupee will remain weak in the near-term."
He, however, said the market expects the government to come up with some concrete policy measures to lift the sentiment in the coming weeks.
"The entire market is interpreting the circular issued by RBI (relating to Exchange Earners' Foreign Currency Account (EEFC)). I think, rupee will rebound to Rs 52.80 level in the next fortnight due to the addition of liquidity in the system," IDBI Bank Treasury Head N S Venkatesh said.
In the near-term, rupee will stay in the range of Rs 52.80-Rs 53.50 level and do not expect it to breach Rs 54 level, he added.
Regarding RBI intervention, he said the central bank would intervene whenever there is volatility.
The BSE benchmark Sensex today dipped by 127.07 points, stretching losses for the fourth day in a row.
The dollar index was up by 0.06 per cent against a basket of currencies as traders preferred to buy dollar rather than going to riskier assets like stocks, which are now showing sluggish trend globally. (MORE)
