Rupee drops further by 20 paise vs USD, ends at 66.66

The domestic currency tumbled by 45 paise or 0.68 per cent in two days.

Extending its losses for the second day, the rupee on Wednesday dropped further by 20 paise to end at 66.66 per dollar on persistent dollar demand from banks and importers amidst fresh foreign capital outflows.

Higher crude oil prices in global market also afftected the market sentiment, dealers said.

Weakness of dollar in the overseas market failed to restrict the rupee's fall against the dollar, they added.

Fresh foreign fund outflows mainly affected the rupee value against the dollar. FPIs sold shares worth Rs 800.79 crore yesterday, as per the provisional data.

The rupee opened marginally higher at 66.42 as against Tuesday’s level of 66.46 per dollar at the Interbank Foreign Exchange (Forex) market and moved up further to 66.37 per dollar on initial selling of dollars by banks and exporters.

However, it dropped afterwards to 66.73 per dollar on fag-end dollar demand from banks and importers before ending at 66.66 per dollar, still showing a loss of 20 paise or 0.30 per cent.

The domestic currency tumbled by 45 paise or 0.68 per cent in two days.

Crude oil prices climbed in Asia today after Kuwait said an agreement to freeze output during a producers' meeting this month could still be reached despite conflicting statements by participants.

US benchmark West Texas Intermediate for delivery in May was up 97 cents, or 2.70 per cent, at $36.86 and Brent crude for June was 68 cents, or 1.80 per cent, higher at $38.55. 
The dollar index was up 0.27 per cent against a basket of six currencies in the late afternoon trade.

"Today, rupee traded with a negative bias, taking cues from global equity market as well as considering strong USD against major currencies," Pramit Brahmbhatt of Veracity Financial Services said.

Meanwhile, the benchmark BSE sensex closed marginally higher by 17.04 points or 0.07 per cent to 24,900.63.

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

The benchmark six-month premium for September declined to 200-202 paise from 205-207 paise yesterday and far forward March 2017 contract also moved down to 395-397 paise from 401-403 paise.

The RBI fixed the reference rate for the dollar at 66.5807 and euro at 75.6290.

In cross-currency trades, the rupee ended higher against the pound sterling to finish at 93.58 from 94.36 while fell further against the euro to 75.55 from 75.48.

The rupee also dropped further against the yen to 60.38 per 100 yens from 60.08 previously.