Rupee drops 14 paise to 66.62 vs US dollar

Extending its fall for the third session, the rupee on Monday dropped by another 14 paise to close at 66.62 against the US dollar on persistent demand for the American currency from banks and importers amidst lower domestic equities.

Weakness of dollar in the overseas market as well as good foreign capital inflows restricted the rupee's loss against the dollar, a forex dealer said.

The Indian rupee resumed sharply lower at 66.65 per dollar against last Friday's level of 66.48 at the Interbank Foreign Exchange (Forex) market and dropped further to 66.76 before concluding at 66.62, showing a loss of 14 paise or 0.21 per cent.

The domestic currency has dropped by 40 paise or 0.60 per cent in the last three trading days.

Meanwhile, the dollar index was down by 0.21 per cent against a basket of six currencies in the later afternoon trade.

The RBI fixed the reference rate for the dollar at 66.6839 and euro at 74.9527.

In cross-currency trades, the rupee continued to fall against the pound sterling to finish at 96.51 from 95.65 on last Friday.

It also dropped against the euro to 74.99 per euro from 74.91 per euro previously.

However, the domestic currency moved up against the yen to 59.94 per 100 yens from 60.08.

Overseas, the US dollar was mostly lower against its major rivals, but the Japanese yen hit a three-week low on expectations the Bank of Japan could start lending to banks at negative rates, while sterling hit a five-week high in reaction to President Barack Obama urging Britons to stay in the European Union.

The yen was stronger against its rival currencies in the late afternoon trade in the overseas market with Japanese corporate players moving to pick up the Japanese currency after its rapid depreciation since Friday.

In forward market, premium for dollar dropped further on sustained receivings from exporters.

The benchmark six-month premium for September fell to 189-191 paise from 192-194 paise on last Friday and far forward March 2017 contract also fell to 381-383 paise from 385-387 paise.

Meanwhile, the Indian benchmark Sensex dropped by 159.21 points or 0.62 per cent to end at 25,678.93 today.

Crude prices fell in Asia today following a report saying Saudi Arabia could maintain its total production capacity with the expansion of an oilfield, fuelling fresh concerns about the global supply glut.

US benchmark West Texas Intermediate (WTI) for delivery in June was down 61 cents, or 1.39 per cent, at $43.12 and Brent crude for June dropped 50 cents, or 1.11 per cent, to $44.61.