The Hindu : Business : Steep fall in rupee

Online edition of India's National Newspaper
Wednesday, Sep 29, 2004

Business

Business

Steep fall in rupee

MUMBAI, SEPT. 28. Another spurt in global oil prices to over $50 a barrel sent the rupee tumbling to two-week closing low of 46.1050/1150 a dollar today, pulled down by sustained hectic dollar demand from oil corporates and importers.

Breaching the crucial 46 a dollar barrier, the rupee lost a steep 16 paise from Monday's close of 45.9500/9550 and is now within striking distance of 46.1650/1750 logged at the close of business on September 13, dealers said. It opened distinctly weak at 45.97/99.

The rupee declined by five paise yesterday, dragged down by dollar demand from oil companies and importers.

Persistent heavy dollar demand from large offshore oil companies and importers on the back of soaring world oil prices exerted severe pressure on the rupee with the customary month-end demand adding to its woes, a forex dealer said.

New York light sweet crude oil for November delivery surged to all time high of $50.11 a barrel in Asian trade due to lingering supply constraints.

Traders expect the rupee to remain under pressure tomorrow, as the usual month-end considerations would weigh heavily on its value even as all eyes would be focussed on global oil price trends.

The Reserve Bank of India fixed the reference rate for the U.S. currency at Rs. 46.05 and for the single European unit at Rs. 56.59. — PTI

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