Rupee tumbles 16 paise in early trade

Reversing its three-day climb, the rupee fell 16 paise to 66.62 against the US dollar at the Interbank Foreign Exchange today due to higher demand for the American currency from importers and banks.

Dealers said a strengthening dollar against other currencies overseas amid mounting expectations of higher borrowing costs in the US weighed on the rupee, but a higher opening in the domestic equities cushioned the impact.

The rupee had closed 13 paise higher to end at 66.46 against the US dollar on Tuesday after the Reserve Bank of India, in a surprise move, slashed the key policy rate by 0.25% to 6.25% and on heavy dollar selling by banks and exporters.

Meanwhile, the benchmark BSE Sensex advanced 143.10 points, or 0.50%, to 28,477.65 in early part of the session.