Mumbai: The rupee fell to near a one-week low on Monday hit by heavy demand for dollars from oil importers and tracking a euro that was under pressure.
The falls in the rupee came in the afternoon session, as the euro failed to gain much traction despite broader weakness in the dollar, given concerns about the toll that harsh austerity measures are taking on activity across the region.
Oil importers were also active through the session ahead of the public holiday on Tuesday, spreading their buying across three to four banks via small lots, dealers said.
Buying by state-run oil firms typically picks up during the end of the month to meet payment obligations.
“A sudden bout of importer demand and the sudden fall in the euro pushed the rupee down,” said a dealer with a private bank.
The rupee fell to 52.73/74 to the dollar against 52.54/55 on Friday, with falls late in the session breaking the range-bound trading seen through most of the morning.
The falls on Monday extend a period of recent weakness in the rupee given the country’s economic and fiscal challenges and signs of slowing foreign fund flows.
The Reserve Bank of India has also largely refrained from intervention, despite the increased number of bearish bets on the rupee.
The one-month offshore non-deliverable forward contracts were at 53.04.
In the currency futures market, the most-traded near-month dollar-rupee contracts on the National Stock Exchange, the MCX-SX and the United Stock Exchange all ended around 53.05 on a total volume of $2.8 billion.