Extending its loss for the second day today, the Indian rupee dropped four paise

RELATED ARTICLES Rupee slide: RBI Governor meets Manmohan Singh Rupee up 26 paise against dollar after initial fall Rupee up 26 paise against dollar after initial fall Petrol price hike fails to lift rupee; diesel eyed Rupee hits record low; govt may lift diesel price

to close at 43.78/79 against the greenback on continuing demand for the US dollar from oil refiners amid a fresh surge in crude prices.

In lacklustre activity at the Interbank Foreign Exchange (forex) market, the domestic currency moved in a range of 43.70 and 43.80 during the day. It had closed at 43.74/75 a dollar on Wednesday.

Forex dealers said the Reserve Bank, which is suspected to have bought dollars heavily on Tuesday when the rupee fell to 44.16 level, kept a low profile today. But fears of its intervention in favour of the Indian unit kept traders away from the market, they added.

Traders said the activity was dull throughout but oil refiners bought the greenback in small batches for the month-end import payments even as global crude oil prices surged to USD 119.70 a barrel in Asian trade today.

India imports 70 per cent of its oil requirements and rising oil prices increase the import bills and in turn, push up dollar demand from oil companies.

Sustained capital outflows from equity market, which fell by another 248 points, or 1.74 per cent, also weighed on the rupee sentiment, dealers said.