Demand for dollars by oil companies, muted foreign fund activity as the year-end nears and the continuing political logjam in New Delhi combined to weaken the rupee to a two-and-a-half-month low. The rupee, after touching an intra-day low at 55.89 to a dollar, recovered slightly to close at 55.73, but was still weaker by 21 paise to its Friday close of 55.52. The rupee’s weakness, however, had a positive impact on software and other exporters since this would mean a boost to their revenues in rupee terms.
Monday’s market witnessed the sixth consecutive session of weakness for the rupee. This has left the Indian currency weaker by 3.8% in less than a month.
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