Rupee declines by 21 paise against US dollar

Snapping a two-day gaining streak, the rupee today fell by 21 paise to 51.41/42 against the US dollar on hefty demand for the US currency from importers amid weakness in local stocks.

Forex dealers said some banks also bought dollar on hopes of a further fall in its value overseas before the outcome of the European leaders summit on Friday to tackle the region's crisis.

They, however, said signs of increased capital inflows and weak dollar overseas restricted the rupee's fall. At the Interbank Foreign Exchange (Forex) market, the rupee opened weak and immediately touched a high of 51.23.

However, later it fell back to settle the day at 51.41/42, down 0.41% from its previous close. In the previous two trading sessions, the local currency had gained a rupee, or 1.92%.

The BSE benchmark, Sensex, today declined by 41.50 points, or 0.25%, to 16,805.33 today, after registering gains in the last three-sessions. FIIs infused USD 340.62 million in three sessions since November 30, as per the Sebi data.

The rupee premium for the forward dollar continued its north-bound journey on consistent paying pressure from banks and corporates.