Dollar demand puts rupee on backfoot after 3 days
Mukherjee said inflation especially the food inflation remained very high during the major part of the year.
The rupee today snapped its three-day gaining streak to end lower by 20 paise at 51.90/91 against the American currency on emergence of dollar demand from importers.
At the Interbank Foreign Exchange (Forex) market, the domestic unit opened weak at 51.84/85 a dollar.
Later, it moved erratically in a range of 51.53 and 51.92, before concluding at 51.90/91, showing a fall of 0.39 per cent.
In last straight three trading days, the rupee had gained 128 paise, or 2.42 per cent.
Traders said little action in the stock market too weighed on the rupee. The BSE benchmark Sensex ended up by mere 10.77 points, or 0.07 per cent, at 16,175.86.
They, however, added that continued foreign funds inflow in debt as well as equities cushioned the rupee's steep fall.
Foreign institutional investors (FIIs) pumped in $1.88 billion in the debt markets and $274.70 million in equities in the current month till January 10, as per Sebi data, which limited the rupee fall.
Fresh dollar demand from importers, mainly oil refiners, and some banks at current levels mainly affected the rupee value against the dollar, a forex dealer said.
The dollar index, consisting of six major rivals, was up by over 0.4 per cent, while New York crude oil was trading nearly 101.5 a barrel in the European market today. The rupee premium for the forward dollar closed higher on fresh paying pressure from banks and corporates.
The benchmark six-month forward dollar premium payable in June settled up at 158-160 paise from Tuesday's close of 153-155 paise and far-forward contracts maturing in December ended strong at 265-267 paise from 257-259 paise previously.
The RBI has fixed the reference rate for the US dollar at 51.7495 and for the euro at 65.9910.
The rupee remained firm against the pound sterling to conclude at 79.85/87 from overnight close of Rs 79.91/93 and also moved up further against the euro to Rs 65.94/96 from Rs 66.08/10 yesterday.
It, however, fell back against the Japanese yen to Rs 67.39/41 per 100 yen from last close of 67.26/28.