Rupee weakens against dollar

MUMBAI: The rupee on Wednesday fell to 40.40/41 against the US currency, after a three-day winning streak, on dollar buying by state-owned banks as well as oil corporates.

Public sector banks made fairly good dollar purchases at the behest of the Reserve Bank of India (RBI), which was seen intervening in exchange market to prevent rupee's surge past 40.40 level, forex dealers said.

Oil refiners too bought dollars to meet their import proceeds amid high global crude prices.

In an otherwise dull trade at the Interbank Foreign Exchange (forex) market, the local currency was trapped in a small range of 40.3700 and 40.4550 after resuming at 40.38/40 per dollar over previous close of 40.36/37 per dollar.

Sluggish trend in Asian equity markets also weighed on the rupee sentiment.

Backed by the strong inflows data, the rupee resisted the pressure of demand for greenback throughout the day, said a dealer with a leading bank.

Foreign Institutional Investors (FIIs) have pumped in a large USD 2.7 billion in equity in the first fortnight of July aiding the rupee to surge to nine-year high in the current year.