Rupee drops by 7 paise to 73.61 on dollar buying by banks

Mumbai: The rupee depreciated by 7 paise to close at 73.61 against the US dollar on Friday due to dollar buying by banks possibly on the behalf of the Reserve Bank.
At the interbank forex market, the local unit opened weak at 73.62 against the US dollar and remained under pressure for the most part of the session. It moved in a range of 73.46 to 73.67 against the US dollar in day trade.
The local had settled at 73.54 against the greenback in the previous session on Thursday.
“The Indian rupee ended weak against the US Dollar on Friday and posted its worst weekly decline against the US currency in six weeks on persistent dollar purchases by state-run banks to offset the impact of robust foreign inflows,” Sriram Iyer, Senior Research Analyst at Reliance Securities, said.
The rupee dropped by 26 paise or 0.35 per cent this week, its third weekly decline in a row. Iyer said that risk appetite waned amid uncertainty over the timing of the fiscal stimulus in the US.
“Indian rupee underperformed among Asian peers amid dollar buying from foreign banks and importers. Central bank’s aggressive dollar buying has capped the gains in rupee,” Devarsh Vakil, Deputy Head Retail Research, HDFC Securities, said.
The Reserve Bank of India has bought USD 9 billion in the first two weeks of the current month as per the weekly forex reserve data.
“While on the inflow front, foreign institutions have bought worth USD 2 billion equities in secondary market in October month,” Vakil said.

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