Re plunges by 43 paise to 1-mth low of 53.84 on heavy $ demand

Re plunges by 43 paise to 1-mth low of 53.84 on heavy $ demand

The rupee today fell by a whopping 43 paise to close at one-month low of 53.84 on the back of heavy dollar demand from oil importers and defence companies, extending losses for the second straight day.

A firm dollar overseas against the Euro increased pressure on the rupee sentiment, while FII inflows worth Rs 80 crore could not help rupee recover from lows, forex dealers said.
The rupee commenced remarkably lower at 53.70 a dollar from last close of 53.41 at the Interbank Foreign Exchange (Forex) market and immediately touched a high of 53.58.

However, persistent dollar demand from importers, mainly from oil refiners, and defence companies amid weakness in local stocks put pressure on the rupee.

"There was significant dollar demand as the US currency gained strength in the global market," said Ashutosh Raina, chief dealer at HDFC Bank.

It fell back to a low of 53.99, before concluding slightly better at 53.84 -- a fall of 43 paise or 0.80 per cent. Yesterday, it had tumbled by 54 paise or 1.02 per cent.

The rupee had last ended at 54.38 on September 20."There was dollar demand from defence-related companies today but the quantum is not immediately known. It was one of factors why rupee slumped so much today," said a treasury head of a state-run bank.

The rupee after closing at a recent high of 51.74 on October 4, appears to have lost steam and is seen fast approaching the 54-mark as FII inflows have slowed.

The dollar index, a gauge of six major global currencies, was up by 0.11 per cent, as the first day of a summit meeting of European Union leaders produced no surprise, said global analysts.

For the week ended October 19, the rupee was down nearly 2 per cent -- its biggest weekly loss in about 4 months.