Indian rupee weakens against dollar

The Indian rupee has fallen for the second consecutive day against the dollar, losing 48 paise to finish the day at 54.97 on heightened demand for the greenback from importers despite strong fund flows into stocks.

Traders said the Indian currency was pressurised all through the session as the dollar gained ground on rivals on hopes that the European Central Bank (ECB) will put its main interest rate down to a record low to support the eurozone’s struggling economy.

The rupee opened at 54.80 in the Interbank Foreign Exchange market, after closing the previous night at 54.49. It later fell further to a low of 55.23 before recovering to settle at 54.97, a drop of 0.88 per cent. Geojit Comtrade currency strategist Hemal Doshi said that there were no indications that the Royal Bank of India would intervene, adding that after the rupee firmed in the previous 3-4 sessions, this kind of pullback was expected.

Market players said FII inflows of Rs 430 into stocks did not help the Indian currency mark a turnaround. IDBI Bank head of treasury N S Venkatesh said that the fall in the rupee occurred because of oil importers’ demand and the euro’s weakening versus the dollar.