Rupee extends decline tracking broad dollar rise

Rupee extends decline tracking broad dollar rise

Mumbai: The rupee extended its fall in afternoon session on Tuesday tracking the dollar’s sharp gains versus major currencies and some demand from foreign banks and also dollar buying for defence-related payments.

At 2:15pm, the partially convertible rupee was at 44.89/90 per dollar, much below Monday’s close of 44.70/71.

The dollar edged broadly higher on Tuesday, with the yen on the backfoot after upbeat US data suggested the world’s biggest economy will accelerate in 2011.

The index of the dollar against six major currencies was up 0.17% at 79.262 points.

Traders said there was some dollar buying by state-run banks likely for some defence-related purchases of the government.

Indian shares flip-flopped as positive sentiment due to firm Asian peers was offset by losses in financial shares as investors booked profits after four sessions of rise.

One-month offshore non-deliverable forward contracts were quoted at 45.13, weaker than the onshore spot rate.

In the currency futures market, the most traded near-month dollar-rupee contracts on the National Stock Exchange and MCX-SX were both at 45.0975, with the total traded volume on the two exchanges at $3.7 billion.