Rupee falls 48 paise against dollar

The Indian rupee washed out all of its overnight gains and closed sharply lower by 48 paise at 55.42 against the US currency on heavy dollar selling by exporters amid smart rise in dollar overseas.

Failing to promise more US easing in the near term by Federal Reserve Chairman Ben Bernanke in his testimony to Congress on Friday also helped the US dollar to gain against its other peers.

Late recovery in local stocks amid renewed capital inflows failed to stem the rupee fall, a forex dealer said.

At the Interbank Foreign Exchange (Forex) market, the local currency resumed lower at 55.18 a dollar against Thursday's close of 54.94 and later moved in a wide range of 55.14 and 55.67 before concluding at 55.42, a fall of 0.87 per cent. Yesterday, it had gained by 42 paise or 0.76 pct.

The Indian benchmark Sensex recovered its initial losses and closed higher by 69.82 points or 0.42 per cent.

The dollar index was up by nearly 0.65 per cent against a basket of currencies and New York crude oil was trading above $82 a barrel in European market on Friday.

Pramit Brahmbhatt, CEO, Alpari Financial Services (India) said," The INR remains weak throughout the day on weakening global currencies on return of global risk aversion due to disappointment from Fed over additional QE infusion. The downgrade of Spain by Fitch also weighed on the rupee by weakening the Euro from 1.2600 levels."