The Hindu : Front Page : Rupee hits 13-month low

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Thursday, May 15, 2008
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Rupee hits 13-month low

Special Correspondent

MUMBAI: The Indian rupee lost another 34 paise against the U.S. dollar at the end of the trading on Wednesday, recording a 13-month low of 42.44/45 against the previous day’s close of 42.10/12 at the inter-bank foreign exchange market here. This was mainly due to heavy demand for dollar from oil refineries.

Global oil prices

Global oil process surged to more than $126 a barrel on Tuesday.

The rupee had lost around 86 paise or 2.07 per cent in the last three continuous trading sessions.

It opened lower at 42.20/22 and recorded a low of 42.67 in intra-day before closing at 42.44/45. The demand for dollar was due to rising crude oil price which was around $126 a barrel on Tuesday.

However, when the markets opened on Wednesday, in early deals, it dropped to around $123.50 after touching a new peak of $126.98 in intra-day trading in New York on Tuesday. Capital outflow was another factor for a fall in rupee value. Foreign institutional investors (FIIs) reportedly taken out over $220 million in three days since May 8.

Even though U.S. consumer prices showed weakness for April, the dollar rebounded against the Euro in early trading on Wednesday.

U.S. stock indices, Dow and Nasdaq, also showed strength when the market opened on Wednesday in the U.S.

The dollar is also up 0.3 per cent against the Japanese yen at 105.10 in early deals on Wednesday.

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