Mumbai: The rupee tumbled by 43 paise on 8 June and ended at a four-week low of 41.13/14 against the greenback on sustained dollar demand from public sector banks on behalf of the central bank, amid weakness in equity market.
The local currency moved in a wide range of 40.85 and 41.25 during the day, after resuming at 40.85/90 per dollar. It had closed at Rs 40.70/71 a dollar on 7 June.
Consistent dollar buying by state-owned banks at the behest of the Reserve Bank of India (RBI) drove rupee to the day’s low of 41.25, forex dealers said.
The rupee sentiment was also dampened by a pull out by Foreign Institutional Investors since 5 June, they added.
The RBI seemed to have stepped its intervention in the exchange market after inflation eased consistently. The inflation fell below 5% mark to 4.85% for the week ended 26 May, making it the sixth consecutive fall.
Oil companies too made fairly heavy dollar purchases at the weekend in the light of high global crude prices. Oil prices eased but were still high at $66.75 a barrel in Asian trade.
Tracking weak global cues, key stock indices, the benchmark Sensex and the S&P CNX Nifty, fell by about another 1% at close on 8 June.