Rupee dips 54 paise to 63.37 vs dollar ahead of US Fed meet

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The rupee on Tuesday fell 54 paise to end at 63.37 against the dollar, the biggest drop in 2 weeks, on fresh demand for the US currency from importers ahead of the Federal Reserve’s 2-day policy meeting.

The fall was restrcited by a drop in the value of the dollar overseas, positive local equities and capital inflows, a forex dealer said.

At the interbank foreign exchange market, the local currency resumed at 63.37 to the dollar from the previous close of 62.83. It moved in a range of 62.95 and 63.6450 before settling at 63.37, a fall of 54 paise or 0.86 per cent.

It was the biggest drop for the rupee since September 3, when it fell 163 paise to 67.63 against the dollar. It had gained 67 paise during the previous two sessions.

“On the domestic front, Monday inflation numbers have dented sentiment,” said Abhishek Goenka, CEO of India Forex Advisors. “Going ahead, the two-day FOMC meeting starting today and the RBI monetary policy on September 20 will be driving the markets.”

The rupee trimmed gains yesterday after the government said inflation as measured by the wholesale price index was 6.1 per cent in August, the fastest pace in six months.

The Federal Open Market Committee (FOMC) meeting starts Tuesday and investors expect a decision on a reduction in the pace of its bond-buying programme. The dollar index, a gauge of 6 major global rivals, was down 0.15 per cent.

Domestic stocks were choppy and the benchmark S&P BSE Sensex ended 61.56 points higher. Overseas investors injected a net $ 50.22 million in stocks yesterday, as per data from the Securities and Exchange Board of India.

“The trading range for the spot $-INR pair is expected to be within 63 to 64,” said Pramit Brahmbhatt, CEO of Alpari Financial Services (India).

Forward dollar premiums closed down on fresh receipts by exporters. The benchmark 6-month forward dollar premium payable in February declined to 254-1/2-259-1/2 paise from the previous close of 257-1/2-262-1/2 paise and far-forward contracts maturing in August moved down to 460-465 paise from 462-467 paise.

The RBI fixed the reference rate for the dollar at 63.3770 and for the euro at 84.5980.

The rupee dropped to 100.83 against the pound from 100.08 previously and to 84.67 per euro from 83.92.

It dipped against the Japanese yen to 63.94 per 100 yen from 63.55.