Re plunges by 79 paise to 52.64, logs 2nd biggest fall in 2012

The rupee today witnessed its second biggest fall of 79 paise in 2012 to settle at a one-week low of 52.64 in tune with sluggish stock market amid the US currency logging smart gain in the overseas market.

Sustained dollar demand from importers also weighed on rupee while capital inflows worth USD 110 million managed to cushion rupee's losses to a small extent, forex dealers said.

The rupee resumed weak at 52.12 a dollar from last Friday's close of 51.85 and soon after touched a high of 51.97 in late morning session. However, good dollar demand from importers, mainly oil refiners, amid weakness in local stocks and dollar short-covering put the pressure back on rupee.

The local unit fell back to a low of 52.65 before concluding at 52.64, a fall of 79 paise or 1.52 per cent.

This is the biggest daily fall for rupee this calendar year since 85 paise or 1.51 per cent on June 22 when it had settled at an all-time low of 57.15.

The Indian stock market benchmark today plunged by 229.48 points or 1.21 per cent over
its Friday's fall.

The dollar index was up by 0.42 per cent against a basket of six currencies after Friday's US unemployment data and ahead of a meeting of Euro-zone finance ministers later today.
Pramit Brahmbhatt, CEO, Alpari Financial Services (India) said: "Short covering after a strong technical reversal coupled with weak global markets weighed on rupee which extended its weakness by over 1.5 per cent. The dollar index rose to the 79.70 levels as global risk aversion continued to dominate the global markets."

The rupee weakened against the dollar after making a five month high of 51.37 levels and if rupee continue to hold above 51.80 levels for next few days then we could say a temporary bottom is made, said Abhishek Goenka, Founder & CEO, India Forex Advisors.