Rupee tanks to over 8-month low Vs dollar at 61.96, down 22 p

The Indian rupee extended its losses for the fifth session in a row and ended at 8-1/2-month low of 61.96 against the Greenback today following sustained dollar demand from oil importers and weakness in local stock market.

Slowdown in inflows also weighed on rupee that ended 22 paise lower while the dollar index was trading almost stable against its six major global rivals ahead of the release of the minutes of a key US Federal Reserve meeting.

At the Interbank Foreign Exchange (Forex) market, the local currency commenced lower at 61.80 a dollar from previous close of 61.74 and immediately touched a high of 61.7850.

However, dollar demand pulled down the rupee as it fell back sharply to a low of 61.9950. It settled at 8-1/2-month low of 61.96, logging a drop of 22 paise or 0.36 per cent.

This was its weakest closing since finishing at 62.04 on March 3, 2014. It had also logged intra-day low of 62.15 on March 4, 2014.

"Crude oil prices had fallen in the initial half of the day and prompted oil companies to speed up their greenback purchases also hurt sentiments. Furthermore, a fall in local stocks triggered concerns of foreign fund outflows that also weighed on rupee," said Suresh Nair, Director, Admisi Forex India.

The rupee has weakened by 45 paise in five straight days.
In the stock market, the benchmark S&P BSE Sensex today tumbled by 130.44 points, or 0.46 per cent, after touching intra-day all-time peak of 28,294.01.

FPIs/FIIs bought shares worth USD 2.44 million yesterday, as per Sebi data.
Pramit Brahmbhatt, CEO, Veracity Group, said: "Trading range for the spot rupee is expected to be within 61.60 to 62.40."

The dollar hit a new seven-year high against the yen and held near a over one-year peak versus sterling.

Forex experts said investors added favourable bets ahead of US Federal Reserve minutes that could highlight policy difference with its peers as hopes are high that Fed minutes will sound relatively more hawkish.

In the forward market, premia closed mixed. The benchmark six-month premium payable in April softened to 208-210 paise from last close of 208.5-210.5 paise while forward contracts maturing in October, 2015 rose to 429-431 paise from 426.5-428.5 paise.

The Reserve Bank of India fixed the reference rate for dollar at 61.8280 and for the Euro at 77.4210.

The rupee dropped further against the pound to 97.18 from 96.71 previousl and remained weak against the euro to end at 77.70 from 77.28.
It, however, strengthened to 52.68 per 100 Japanese yen from Tuesday's close of 52.93.