Rupee slips to 1-week low; down 9 paise

The rupee on Thursday fell by nine paise to hit a one-week low level of 54.25 against the dollar due to sustained demand for the US currency for oil and gold related payments.

The local unit commenced slightly higher at 54.14 against the dollar on firm capital inflows in equities compared to on Wednesday's close of 54.16 at the Interbank Foreign Exchange market.

However, it dropped to a low of 54.32 due to sustained dollar demand from importers for oil and gold related payments before closing at 54.25, a fall of nine paise, or 0.16 per cent, from its previous close, forex dealers said.

Overseas investors continued to pour money into local equities and bought shares worth Rs 662.88 crore (over $120 million) today, according to BSE provisional data.

"There was dollar buying happening in the market which put pressure on the rupee. The rupee was seen range

bound along with the euro and dollar Index in the absence of any fresh catalyst," said Abhishek Goenka, Founder and CEO, India Forex Advisors.

The dollar index was up by 0.04 per cent against a basket of six major global rivals.

Meanwhile, the BSE benchmark Sensex fell by 51 points to 19,939.04.

The premium for the forward dollar continued its downslide on sustained receivings by exporters.

The benchmark six-month forward dollar premium payable in October dropped to 168-170 paise from Wednesday's close of 172-1/2-174 paise and far-forward contracts maturing in April also fell to 332-334 paise from 339-341 paise.

The RBI fixed the reference rate for the US dollar at 54.2415 and for the euro at 71.3620.

The rupee fell back against pound sterling to 84.44 from overnight close of 83.95 while declined further against the euro to 71.26 from 71.07.

It remained weak against the Japanese yen to 54.92 per 100 yen from previous close of 54.70.