Update: Rupee closes 16 paise lower at 63.57 on bearish equities

In tandem with steep fall in local equities, the rupee washed out initial gains and depreciated for the second day by 16 paise to close at 63.57 against the Greenback.

Sustained dollar demand from importers amid firm US dollar oveseas too weighed on the rupee while continued capital inflows restricted the fall to some extent, a dealer said.

At the Interbank Foreign Exchange (Forex) market, the domestic unit commenced better at 63.37 a dollar from previous close of 63.41 and improved further to a high of 63.30.

Later, it met with strong resistance following crash in local stocks to a low of 63.62 before concluding at 63.57, a net fall of 16 paise or 0.25 pct. On Monday, it was down by 12 paise or 0.19 per cent.

The benchmark S&P Bombay Stock Exchange (BSE) Sensex on Tuesday plunged by 855 points or 3.07 per cent - largest fall since July 6, 2009 - to end at more-than two-week low on fall in global crude oil prices and political uncertainty in Greece.

FPIs, however, picked up shares worth $77.29 million on Monday, as per Securities and Exchange Board of India (Sebi) data.

The dollar index, a gauge of six major global rivals, was up by 0.25 per cent.

Mr. Pramit Brahmbhatt, Veracity Group, CEO said,"Today also Indian Rupee depreciated almost by quarter per cent, taking cues from dollar demand from oil companies which dented the Rupee movement. Local equities closed down by three per cent for the day which forced Rupee to trade weak. The trading range for the Spot rupee is expected to be within 63.20 to 64.00."

Meanwhile, premia closed weak on fresh receivings by exporters. The benchmark six-month premium payable in June declined to 222.5-224.5 paise from 225-227 paise on Monday.

Premium on forward contracts maturing in December also moved down to 426.5-428.5 paise from 434-436 paise.

The Reserve Bank of India (RBI) fixed the reference rate for dollar at 63.3850 and for Euro at 75.7958.

The rupee remained firm to end at 96.57 against the pound from 96.74 previously while fell back slightly to 75.61 per euro from 75.53.

It dropped further to 53.40 per 100 Japanese yen from 52.68 on Monday.