Rupee resumes slide, tumbles 19 paise to 79.13 against US dollar

Resuming its slide after a day's pause, the rupee declined 19 paise to close at 79.13 against the US dollar on Thursday as a firm greenback overseas and unabated foreign capital outflows outweighed the impact of RBI's measures to support the domestic currency.

At the interbank foreign exchange market, the rupee opened at 79.05 and shuttled between a high of 78.90 and a low of 79.26.

It finally settled at 79.13, down 19 paise over its previous close of 78.94.

The rupee had jumped 39 paise on Wednesday -- its best single-day gain in over three months -- after the RBI raised overseas borrowing limits for companies and liberalised norms for foreign investments in government bonds as it announced a slew of measures to boost foreign exchange inflows and curb the fall of the rupee, which has slumped to record lows against the US dollar in the past few sessions.

"Rupee opened on a flat note but started to come under pressure despite measures announced by the RBI," said Gaurang Somaiya, Forex & Bullion Analyst, Motilal Oswal Financial Services.

The central bank had also said it has been closely monitoring the liquidity conditions in the forex market and has stepped in as needed in all segments to alleviate dollar tightness with the objective of ensuring orderly market functioning.

Forex traders said the US Federal Reserve's minutes of the meeting held last month indicated a hawkish stance and a rate hike of 75 basis points is likely in July. The minutes were released on Wednesday.

"Dollar rose against its major crosses after the minutes reaffirmed Fed's intent to get prices under control to address stubborn inflation," Somaiya said, adding, "We expect the USD-INR to trade sideways but with a positive bias and quote in the range of 79.05 and 79.80."