Bears dominated the money market on Monday as the rupee tumbled with modest losses versus the dollar in the process of trading, dealers said.
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15 against the US dollar in early commerce on Monday at the Interbank Foreign Exchange on account of appreciation of the American foreign money overseas.
They expect the central bank, which has so far this year directed the market through the state-run bank, to let the currency remain weaker after Monday’s parliament elections due to importer dollar demand and global trend.
The dollar edged higher against other major currencies amid uncertainty over the impact of the yuan’s devaluation last week as well as global inflation expectations against the backdrop of Fed rate hike.
The rupee was trading at 65.315 a dollar, after falling to 2-year low of 65.37 earlier.
At the close, the benchmark 30-share index, BSE Sensex lost 189.04 points or 0.67% at 27,878.27 with 20 components posting drop.
“The wider trade deficit is a matter of concern”, said Naveen Raghuvanshi, a Mumbai-based currency trader at DCB Bank Ltd. “Broad gains in the dollar and losses in local equities are also weighing on the rupee”. Further, trade data which was released on Friday after the market closed hit the sentiment.
In the forward market, the premium for dollar continued to fall on sustained receivings from exporters.
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The RBI fixed the reference rate for the dollar at 65.220 and for the euro at 72.3942.
