In sync with the weak stock market, the Indian rupee yesterday ended lower by six paise at 48.97/98 against the greenback. Continued capital outflows from the equity markets also affected the rupee sentiment.
In a rangebound trade at the Interbank Foreign Exchange (Forex) market, the domestic unit resumed lower at 48.95/96 a dollar but improved to a high of 48.88 on the back of initial firmness in equity markets. However, a negative turnaround in local share prices after midsession weighed on the rupee and it fell back to a low of 49.03 before ending the day at 48.97/98 a dollar, still lower from previous close of 48.91/93.
Indian benchmark Sensex Thursday ended lower by over 21 points or 0.23 per cent. Dealers attributed narrow breadth to alternate bouts of buying and selling on the last day of expiry of January contract at the currency futures exchange MCX-SX for the fall in rupee. Some dollar buying by state-run banks on behalf of their clients, mainly oil refiners, to meet their month-end requirements put pressure on the rupee, they added.
Also firm dollar against its major rivals in Asian trade Thursday also led the rupee fall. The euro fell Thursday against the dollar after the Obama administration approved stimulus package to stem the deepening recession.
The Reserve Bank of India, however, fixed the reference rate for the US dollar at Rs 48.90 and for the Single European Currency at Rs 64.10.