Rupee slips to near 1-week low on firm US dollar

Mumbai, Aug 29 (PTI) The rupee today lost 12 paise toclose at near one-week low of 67.18 a dollar due to strongdemand for the US currency amid expectations of rate hike bythe US Federal Reserve before the end of the year. A smart rebound in the stock market and sustained capitalinflows, however, restricted the rupee loss. India will not be immune from the impact of the potentialSeptember rate hike, but is better placed than most of itsrivals at this juncture, a forex dealer said. Federal Reserve chair Janet Yellen in her speech at theannual Jackson Hole conclave last week hinted at a secondinterest rate-hike sooner rather than later against thebackdrop of continued solid performance of the US labourmarket and economic activity. In global trade, the dollar maintained its bullishmomentum against major trading counterparts. In early trade,the US dollar index was up 0.27 per cent at a fresh two-weekhigh of 95.76 against a basket of six major currencies. The rupee today resumed substantially lower at 67.14compared to previous close of 67.06 at the Interbank ForeignExchange (forex) market on fresh bouts of dollar demand. It kept descending, weighed down by early fall in localequities and strengthening dollar value to hit an intra-daylow of 67.22, before ending at 67.18, revealing a loss of 12paise, or 0.18 per cent. The RBI fixed the reference rate for the dollar at67.1810 and euro at 75.1823. In cross-currency trades, the rupee recovered against thepound sterling to end at 87.83 from 88.53 and reboundedagainst the euro to settle at 75.08 as compared to 75.71. It also bounced back against the Japanese yen to finish at65.73 from 66.75 per 100 yens. In the forward market, premium for dollar remained underimmense pressure due to continued receipts by exporters. The benchmark six-month premium for January declined to163.5-165.5 paise from 166-168 paise and the forward July 2017contract also moved down to 354.5-356.5 paise against360-362 paise last Friday. Meanwhile, the BSE Sensex rose by 120.41 points to closeat 27,902.66 while the broader Nifty rose 34.90 points to endat 8,607.45. Foreign portfolio investors bought shares worth Rs 286.52crore on net basis today, provisional exchange data showed.PTI EDM BPDMR