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Rupee drops 13 paise to 67.20 against dollar

Rupee drops 13 paise to 67.20 against dollar

The rupee on Monday depreciated by 13 paise to end at 67.20 against the American currency owing to sustained dollar demand from banks and importers.

Sluggish local equities even put more pressure on the domestic unit despite weak dollar overseas.

Trading sentiment was by and large tepid as traders refrained from taking any fresh positions and anxiously awaiting the announcement of the next RBI governor, a forex dealer commented.

The domestic currency opened substantially lower at 67.15 a dollar against last Friday’s closing value of 67.07 at the Interbank Foreign Exchange (Forex) market here due to increased demand for the American unit.

But it reversed most of its initial losses in late morning deal and rebounded smartly to hit a fresh intra-day high of 67.0525 following fresh dollar selling by exporters.

However, the recovery proved short-lived in absence of any positive economic indicators and witnessed a sharp reversal in afternoon session to touch a low of 67.21 before ending at 67.20, revealing a loss of 13 paise, or 0.19 per cent.

The rupee had dropped 16 paise to 67.07 on last Friday.

Meanwhile, RBI Governor Raghuram Rajan on Monday said the current level of the rupee is “pretty reasonable” and any attempt to devalue it may lead to a surge in inflationary pressures and “offset any benefits”.

He also said that India has to go a long way to reach the per capita GDP level of China and needs many more years of sustainable strong growth.

The RBI fixed the reference rate for the dollar at 67.1015 and euro at 74.1673.

In cross-currency trades, the rupee rebounded sharply against the pound sterling to finish at 89.06 compared to 89.51 last weekend and also firmed up against the euro to end at 74.28 from 74.65.

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