The Hindu : Business : Rupee tumbles 36 paise

Online edition of India's National Newspaper
Thursday, Apr 13, 2006

Business

Business

Rupee tumbles 36 paise

Impact of heavy dollar demand from PSBs

MUMBAI: The rupee on Wednesday tumbled against the U.S. dollar and closed at a three-and-a half month low of 45.19/20 a dollar due to heavy dollar demand from select public sector banks and also due to heavy selling by foreign institutional investors (FIIs) in the stock markets.

In active trading at the interbank foreign exchange market, the Indian currency started with fresh gains at 44.7850/7950 following fall in dollar in the international market.

Later, the rupee plunged to a low of 45.2600/2700 on heavy dollar demand and closed at 45.19/20, steeply lower than the previous close of 44.8350/8450.

Wednesday's fall in rupee by around 0.78 per cent was the biggest one-day fall in the current year, a forex dealer said.

The foreign institutional investors have reportedly sold equities worth $96 million last Friday and another $94.8 million on Monday, taking the total selling in the two sessions to a hefty $190.8 million which dampened rupee sentiment to a large extent, dealers said. The rupee also ended weak against the British pound sterling, euro and the Japanese yen. — PTI

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