The rupee weakened to close below the 56 mark to the dollar for the first time this month on the back of high month-end demand for the greenback from oil importers and foreign and nationalised banks.
The domestic currency, which opened at 55.9150, closed at 56.13.
“The trading sentiment was clouded by the uncertainty in the Euro zone…. Demand for dollars was higher from oil importers,” said a foreign exchange dealer with a public sector bank. He also said that the Reserve Bank did not intervene in the market.
The rupee touched an intra-day high and low of 55.82 and 56.16, respectively.
“The revision of the country’s outlook by Fitch has added to the gloom,” Mr Bitupan Majumdar, Head of Forex derivatives, JRG Securities said.
Referring to the range bound behaviour of the local unit, Mr Majumdar said falling oil prices has lent some stability to the rupee. The rupee has stayed range bound in the 55-56 per dollar mark this month so far. “I expect rupee to go lower to 57.50 to 58 against the dollar in about 3-4 months,” he said.
Call eases, G-sec flat
The inter bank call rates, which opened at 8.30 per cent, softened to 8.10 percent.
The 8.79 per cent government security maturing in 2021 closed at Rs 102.56 (yield: 8.39 per cent) compared with Tuesday’s close of Rs. 102.52 (yield: 8.39 per cent).