The rupee hit its latest 2006 low at 46.12 per dollar on Monday, on heavy month-end dollar demand from importers, oil companies and custodial banks, traders said. The partially convertible rupee ended 0.46 percent lower on the day at 46.09/10 per dollar. It ended on Friday at 45.88/8850, down 0.7 percent on the week.
"The demand for dollars was across the board. Foreign banks bought a large amount (of dollars) in the afternoon. There was some selling by exporters, who expect the rupee to weaken further," a foreign exchange broker said.
"Two foreign banks were mopping up dollars. The month-end demand (for dollars) is high," said a foreign exchange broker. Dealers said a state-owned bank was selling dollars at 46.02, which checked the rupee's fall.
Dealers suspected this could have been on behalf of the central bank as large state-owned banks sometimes act for the central bank to check sharp swings in the currency. The central bank has been intervening in the past few sessions to cushion the rupee from the recent sell-off in emerging stock and currency markets.
Dealers said the rupee could stay under pressure during the week, with many expecting further equity outflows and dollar demand from oil importers amid firm oil prices.
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