Rupee falls to 3-month low vs dollar

The Indian rupee on Wednesday declined by 11 paise to close at 3-month low of 45.32/33 against the US dollar following weakness in equities amid dollar demand from importers.

At the Interbank Foreign Exchange (Forex) market, the domestic currency opened lower at 45.28/29 a dollar from last close of 45.21/22 and moved in a range of 45.25 and 45.42.

Later, it closed at 45.32/33, the level not seen since February 25, 2011 when it had settled at 45.32/33.

After overnight brief respite, the Indian benchmark Sensex on Wednesday slumped by nearly 165 points or 0.91 per cent which mainly weighed on the rupee.

Pramit Brahmbhatt, CEO, Alpari (Forex) India, said, "Globally dollar weakened against major currencies but the fall in local equities and the payments for oil imports aided dollar to trade stronger against the rupee. Looking at the weak dollar one can expect rupee to gain against greenback. The trading range for the USD/INR will be between 45.10 and 45.60 tomorrow."

Month-end dollar demand from importers too put pressure on the rupee value.

However, Foreign Institutional Investors (FIIs), after straight eight sessions of sell-off, picked up shares worth $7.77 million on May 24.

The dollar index, gauging of six major currencies, washed out initial gains and was trading nearly flat while New York crude oil was trading above $99 a barrel in European market on Wednesday.