The Hindu : Business : Rupee loses 47 paise against dollar

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Tuesday, May 13, 2008
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Rupee loses 47 paise against dollar

MUMBAI: The rupee on Monday tumbled by 47 paise to close at a nearly 13-month low at 42.05/06 against the dollar following heavy dollar buying by oil refiners as crude oil prices remained firm.

Concerns over the widening trade deficit due to higher global crude oil prices and also sustained rise in inflation and steep fall in industrial production mainly weighed on the rupee, dealers said.

In fairly active trade at the interbank foreign exchange market, the rupee resumed lower at 41.62/64 a dollar against the previous close of 41.58/59.

It later fell sharply to close at 42.05/06.

The Indian currency touched a low of 42.11 intra-day to a level last seen on April 13, 2007 when the rupee ended at 42.51/52.

Oil prices remain high

World crude oil prices eased but remained high above $125 a barrel in Asian trade after spiking to a record $ 126.25 a barrel intra-day at the New York Mercantile Exchange last Friday.

The rising oil prices was a main concern for traders, as this might lead to a demand for dollar, affecting rupee sentiment.

Capital outflows in the last couple of days and expectation of more in the coming days due to sustained rise in inflation and sharp fall in industrial production also impacted the rupee. — PTI

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