Mumbai, Nov. 28: The month-end demand for dollars weighed heavily on the rupee today and the Indian currency lost 16 paise against the greenback to end at 45.97.

The dip came on a day when the sensex, bolstered by heavy foreign investments, ended at a record high of 8994.94 and surpassed the 9000-mark in intra-day trades.

The rupee, usually, rules strong against the dollar when there is a surge in the inflow of foreign funds as it leads to an ample supply of the greenback.

In today’s trading, the Indian currency opened on a weak note because of a sharp rise in value of the dollar against other currencies, including the yen and euro. Its fall was accentuated by the month-end demand for dollars.

Opening distinctly weak at 45.89 per dollar, the rupee first tumbled to 45.96 in late-morning deals and later breached the 46 levels to touch an intra-day low of 46.02.

The currency, however, came back from these lows to end at 45.97, lower from the last finish of 45.80 against the dollar.

Indian companies generally buy dollars at the end of every month to make overseas payments.

“The strong dollar overseas, reduced supplies and month-end buying of the US currency by companies and importers exerted pressure on the rupee,” said a dealer.

Moreover, relatively firm crude prices at $58.03 a barrel also weighed on the rupee’s value. The dealer said the rupee is likely to remain under pressure in the near term and added that the currency may again breach the 46 levels.

An analyst at a foreign bank said while the Indian currency is likely to remain under pressure, it may come on a strong wicket early next year.

“There will be a change in the trend from January or February. This is the time when the new chairman of the US Federal Reserve will take over. We may then see the trend of rising interest rates in the US getting stalled at least for a while,” he added.

On the other hand, a few analysts feel that the rupee will recover against the dollar because of higher inflows from foreign institutional investors.

Inflows from foreign institutional investors so far this month are over $780 million and they stand at $8.5 billion this calendar year.