MUMBAI: Rupee dropped to its lowest in nearly two weeks on Tuesday, as falling shares raised concerns of foreign fund withdrawals and month-end
dollar demand from importers applied downward pressure.
The partially convertible rupee ended at 48.78/81 per dollar, off an intraday trough of 48.95, its lowest since Dec. 12, according to Reuters data, but around 1.6 per cent lower than Monday's close of 48.01/03.
The rupee has gained around 2.7 per cent this month, helped partly by foreign portfolio inflows of $462 million in December, but is down nearly 20 per cent in 2008 on equity withdrawals of more than $13 billion. Indian shares fell 2.4 per cent on Tuesday to their lowest close in more than a week, as global economic uncertainties and concerns about corporate earnings triggered a flight from risky assets.
"Trading will remain choppy this week. And we are looking at a range of 47.95 to 49.50 against the dollar," a state-run bank trader said. Traders saw heavy dollar demand from importers, including crude refiners, usually witnessed towards the end of each month.
"This is likely to remain tomorrow and (the rupee) may be reaching 49," Paresh Nayar, chief forex dealer at Development Credit Bank, said.
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