Re falls by 13 paise to all-time closing low of 57.15 vs USD

The rupee today weakened 13 paise to close at 57.15 -- the all-time closing figure recorded on June 22 -- on sustained month-end dollar demand from oil importers amid a firm US currency overseas.

At the Interbank Foreign Exchange (Forex) market, the local unit opened slightly weak at 57.06 a dollar from overnight close of 57.02. Persistent month-end dollar demand from importers, mainly oil refiners, kept the rupee under pressure as it moved in a tight range of 57.05 and 57.24.

The sentiment was against the rupee with the dollar rising against its rival euro in overseas markets. The rupee finally closed at 57.15, a fall of 13 paise or 0.23 per cent. Dealers said a positive trend in stocks with Sensex rising 61 points and renewed capital inflows as FIIs pumped in Rs 86.09 crore cushioned against a sharper fall in rupee today.

"Rupee was quite range bound today with no trigger for movement towards any direction. The market will take cue from the European summit which is beginning tomorrow," Hemal Doshi, Currency Strategist, Geojit Comtrade said. He added there was no intervention today from the RBI.

The currency hit a record low of 57.32 on June 22 and has so far shed 7 per cent value against the dollar in 2012, making it worst performing currency in Asia. The dollar index was trading up by 0.04 per cent against a basket of six major currencies while New York crude oil was quoting above USD 79 a barrel in the European market today.

Meanwhile, the Indian benchmark Sensex today closed up by over 61 points amid hopes of speedy economic reforms. Pramit Brahmbhatt, CEO, Alpari Financial Services (India) said," The overall structure for rupee is still weak and a move above 57.60 shall then target 58.00 levels in near term."

With the expectations of the upcoming EU summit becoming a non-event there has been much pressure on global markets, said Brahmbhatt of Alpari.

"The other euro nations such as Cyprus joining the PIGS (Portugal, Ireland, Greece and Spain) the eurozone debt contagion has been spreading keeping the risk aversion phenomenon on in global markets. The evening session will see some spending and housing numbers from US and a weaker-than- expected numbers will raise the stimulus hopes. A better-than- expected number will drain out liquidity from the markets which is a negative," he added.

Abhishek Goenka, Founder & CEO, India Forex Advisors said that rupee is likely to continue its slide against US dollar. "... as long as global risk aversion is taking place, rupee will weaken. We might see a small appreciation in rupee in the near term, but the major trend remains bearish and we expect the levels of 57.50-57.70 within next month," he said.

The premium for the forward dollar continued to rule firm on sustained paying pressure from banks and corporates. The benchmark six-month forward dollar premium payable in November ended a tad higher at 160-162 paise from overnight close of 159-161 paise.

The premium for far-forward contracts maturing in May also rose further to 309-311 paise from 304-306 paise. The RBI fixed the reference rate for the US dollar at 57.2165 and for euro at 71.4625. The rupee moved down further against the pound sterling to end at 89.26 from Tuesday's close of 89.09 and also declined to 71.38 per euro from 71.20 previously. However, it recovered against the Japanese yen to 71.71 per 100 yen from last close of 71.87.