Forex: Rupee snaps 2-week winning spree against the dollar

Forex: Snapping two-week winning spree against the American currency, the rupee dropped by 12 paise to close at 66.89 per dollar on fag-end dollar demand from banks and importers in spite of persistent foreign capital inflows into domestic equity market.

Firm equity markets and foreign capital inflows failed to restrict the rupee's fall against the dollar, a forex dealer said. The rupee opened lower at 66.85 per dollar as against the last weekend's level of 66.77 per dollar at the Interbank Foreign Exchange (Forex) market and hovered in a range of 66.6650 per dollar and 66.9800 per dollar before finishing the week at 66.89 per dollar, showing a loss of 12 paise or 0.18 per cent. The rupee had gained by 31 paise or 0.46 per cent in the previous two weeks.

Meanwhile, the Indian benchmark Sensex extended its gains for the third straight week, surging by 74 points to end at 28,152.40 on fag-end buying in view of good rainfall this monsoon so far, coupled with sustained foreign capital inflows despite profit-booking during the mid-week.

Reserve Bank Governor Raghuram Rajan left interest rates unchanged in his last monetary policy on inflationary pressures but said the central bank's stance remains 'accommodative'. The RBI left the short-term lending rate, or repo rate unchanged at 6.50 per cent and the cash reserve ratio static at 4 per cent.