Rupee drops by 19 paise to 55.69

Tracking weak trends in stock market, the rupee on Monday depreciated by 19 paise to close at 55.69 on heavy month-end dollar demand from oil importers.

At the Interbank Foreign Exchange market, rupee opened weak at 55.57 from last Friday's close of 55.50.

It immediately touched a high of 55.53 in sync with a short-term rise in local shares with foreign institutional investors pumping over Rs 200 crore (Rs 2 billion).

The sentiments in favour of rupee, however, turned negative in line with fall in stock market and heavy dollar demand from importers, mainly oil refiners, to meet their month-end needs weighed on the currency.

Brent crude oil was last trading at $114 a barrel on ICE Futures exchange.

Soon after, the currency dropped to a low of 55.72 a dollar as capital inflows dried up and later concluded at 55.69 -- a fall of 19

paise.

This is the second straight day when rupee has weakened after the 24 paise loss last Friday.

"The month-end oil importers demand continued to weigh on rupee.

"A weak stock market also did not help," said Pramit Brahmbhatt, CEO, Alpari Financial Services (India).

The Indian stock market benchmark Sensex on Monday washed out its early gains and shed 104.40 points.

The dollar index, a gauge of six major global currencies, was down by 0.11 per cent, with traders taking a cautious approach ahead of high-profile speeches later in the week by US Federal Reserve Chairman Ben Bernanke and European Central Bank chief Mario Draghi.

Anindya Banerjee, Currency Analyst, Kotak Securities said: "The quiet trading continues as volumes remains low in both OTC and as well as in exchange as well. . .Now all eyes would be on the upcoming GDP data from India and US and as well as on the Jackson Hole Symposium".