Mumbai: The rupee Monday fell to its nearly five-month low level of 55.11 by losing 23 paise on sustained dollar demand from oil importers and concerns over possible rating downgrade by S&P.

Forex dealers said weakness in local equities and a firm dollar overseas against other currencies also weighed on the rupee.

The local unit commenced the day lower at 55.06 against the dollar from its Friday’s close of 54.88 at the Interbank Foreign Exchange (Forex), market.

However, it later recovered to a high of 54.80 on dollar selling by exporters and initial firmness in domestic equities but again fell to a low of 55.20, before settling at 55.11, a fall of 23 paise, or 0.41 percent. It is rupee’s lowest level since January 7 this year, when it had closed at 55.23.

“The fall in rupee was expected after S&P’s warning to downgrade the Indian economy to junk status on Friday. Also a bearish stock market and weakening in euro and Japanese yen against the dollar also dampened the rupee sentiment Monday,” said N S Venkatesh, Head (Treasury) at IDBI Bank.

He added that rupee will move in a range of 54.80-55.20 this week.

On Friday, global agency Standard & Poor’s threatened to downgrade India’s rating to ‘junk’ status if it fails to pursue reforms.

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