Rupee declines by 6 paise Vs dlr on weak equities

MUMBAI: The rupee today declined by 6 paise to close at 45.04/05 against the US currency due to mild dollar demand from importers and weak equity markets.

"Despite dollar trading weaker against a basket of currencies, the rupee traded lower due to high crude prices resulting in more dollar demand by oil importing companies," said Alpari Forex (India) CEO Pramit Brahmbhatt.

Weak stock markets also weighed on the rupee sentiment, he added.

At the Interbank Foreign Exchange (Forex) market, the local currency opened lower at 45.10/11 a dollar from last weekend's close of 44.98/99.

The rupee touched a low of 45.1750 before closing at 45.04/05, down by 6 paise.

The BSE benchmark index Sensex, which was down by nearly 428 points in afternoon deals, too recouped marginally and ended down by nearly 264 points, or 1.43 per cent.

The rupee is likely to remain strong on the back of expected flow from FIIs and any correction in crude prices will add more fuel to it, Brahmbhatt said.

The New York's main contract light sweet crude for April delivery crossed USD 106 a barrel to about 2.5-year high, while Brent North Sea crude for April breached USD 117 a barrel in Asian trade today on continued worries over the unrest in the Middle East.

Foreign Institutional Investors (FIIs) injected USD 305.04 million in last three sessions since March 1.

The rupee premium for the forward dollar ended further up on continued paying pressure from banks and corporates. The benchmark six-month forward dollar premium payable in August settled better at 138-140 paise from 137-139 paise previously.

Far-forward contracts maturing in February also closed higher at 269-271 paise from 266-268 paise last weekend.

The Reserve Bank of India has fixed the reference rate for the dollar at Rs 45.13 and the euro at Rs 63.06.

The rupee retreated to Rs 73.54/56 against the pound sterling from last Friday's close of Rs 73.23/25 and also fell back against the yen to Rs 54.93/95 per 100 yen from Rs 54.45/47 in its previous close.

It remained weak to finish at Rs 63.17/19 per euro from its last close of Rs 62.84/86.