Mumbai: The rupee Wednesday depreciated by five paisa to 39.4250/4350 as against the US currency in late morning deals on month-end dollar buying and sluggish Asian equity markets amid expectations of a possible interest rate cut by the US Federal Reserve today.
In fairly active trade at the Interbank Foreign Exchange market, the domestic currency resumed slightly better at 39.36/38 a dollar from Tuesday’s close of 39.3750/3850 a dollar. But it fell back sharply to quote at 39.4250/4350 in late morning deals.
Dealers attributed fall in the rupee to weakness in Asian equity markets. The Indian benchmark Sensex was down by nearly 128 points in early trade while other Asian indices were quoted down by 0.25% to 2.25% Wednesday morning.
There was some dollar buying by banks on behalf of their clients, mainly oil refiners, to meet their month-end dollar demand, impacting negatively on the rupee.
Global crude was quoted above $92 a barrel in Asian tradeWednesday.
The Reserve Bank of India, however, in its quarterly monetary policy review Tuesday maintained status quo on its key interest rates cut decision due to inflation concerns.