The rupee lost 9.5 paise against the greenback at 39.76/77 today, the lowest level in two and a half months, on heavy demand for dollar despite a surge in stock markets. The lowest level before this was recorded on November 28 last year at 39.80 The rupee premiums on forward dollar also fell sharply.The benchmark six-month forward dollar premiums payable in July ended at 4 - 6 paise, lower from 8 1/2 - 11 paise on Tuesday and the far-forward maturing in January also ended down to 32 - 34 paise from 37 - 39 paise previously. In the Interbank foreign exchange market, the domestic currency moved in a range of 39.60 and 39.89 on divergent factors after a promising start on signs of stability in Asian markets. The local currency had closed at 39.6650/6750 per dollar on February 12. A record FII inflows had pushed the rupee up by about 12 per cent against dollar last year. Foreign exchange dealers said the demand for dollar continued to peak as foreign banks were seen buying dollars. It seemed situation had not improved since then, the dealers said. Besides, there has been a severe shortage of the US currency in the global markets.Foreign banks, which manage the FII funds in the country, made heavy dollar purchases to cover their short positions, a leading banker said. Renewed dollar demand amid tight supplies of greenback as a result of portfolio outflows weighed on the rupee sentiment, he added.
