The rupee on Monday weakened 19 paise, logging its sharpest drop in about a month, to close at 58.72 against the dollar, amid demand for the American currency from oil importers and late profit-booking in equities.
At the interbank foreign exchange market, it commenced higher at 58.45 a dollar from the previous close of 58.51 and immediately touched a high of 58.41.
Later, it met strong resistance and fell sharply to a low of 58.93 before settling at 58.71, showing a fall of 19 paise or 0.32 per cent. On Friday, it depreciated by five paise. Monday’s drop was the biggest since the 31-paise fall on April 23.
Month-end dollar demand from importers, mainly oil refiners, weighed on the rupee value, forex experts say. The dollar index was down 0.07 per cent against a basket of six major global currencies.
“The rupee was seen approaching levels of 59 today amid weak stock markets which were seen erasing the earlier robust gains posted during the session. Technically, a sustained closing above 58.80 will signal a bullish trend ahead for the dollar/rupee pair,” said Abhishek Goenka, founder and chief executive officer, India Forex Advisors.
Meanwhile, the Indian stock benchmark, S&P BSE Sensex, which was up by almost 482 points in early trade, fell on profit-selling and closed higher by a mere 23.53 points or 0.10 per cent. FIIs sold stocks worth Rs 84 crore on Monday as per provisional stock exchange data.
Government bond prices declined, snapping five-straight session rising trend on the back of fresh selling pressure from banks and corporates.
The overnight call money rates also fell due to lack of demand from borrowing banks amid ample liquidity in the banking system.
The 8.83 per cent 10-year benchmark bond maturing in 2023 dropped to Rs 100.99 from Rs 101.2250, while its yield rose to 8.67 per cent from Rs 8.64 per cent. The 8.12 per cent government security maturing in 2020 moved down to Rs 96.77 from Rs 96.9650, while yield firmed up to 8.78 per cent from 8.74 per cent.