The Hindu : Business : Rupee breaches 43-mark against $

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Friday, Aug 15, 2008
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Rupee breaches 43-mark against $

MUMBAI: After a gap of one month, Indian rupee breached the psychological 43-mark by losing a hefty 37 paise against the dollar at 43.01/02 on strong demand from oil companies. It closed at 42.65 on Wednesday.

Forex dealers said market regulator Securities Exchange Board of India’s decision on Wednesday to continue with curbs on the guidelines for participatory notes, derivative instruments through which many foreign investors trade in Indian equity.

After touching the current year’s low of 43.33/34 on July 1, the domestic currency had gradually appreciated to 42.07/08.

In the last four days, the Indian unit had become cheaper by 2.23 per cent due to stronger dollar overseas and weak equity markets at home.

At the interbank foreign exchange market, the Indian unit fell sharply after resuming weak at 42.82/84 as oil refiners continuously bought dollars. Forex dealers said stronger dollar overseas induced oil companies to cover dollar positions amid possibility of a further rise in the crude prices. They said inadequate dollar supplies caused by capital outflows also weighed on rupee sentiment. Global crude oil prices traded near $117 a barrel in Asian market.

The dollar surged for a 10th straight day against a basket of currencies in Asian markets on Thursday following the global economic outlook.

The RBI fixed the reference rate for the U.S. dollar at Rs. 42.82 and for the single European currency at Rs. 63.83. — PTI

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