The Hindu : Business : Rupee tumbles 60 paise

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Tuesday, Mar 31, 2009
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Business

Rupee tumbles 60 paise

Crude prices fall below $51 a barrel in Asian trade

MUMBAI: The rupee on Monday plunged by 60 paise against the greenback, after a gap of six trading days, to 51.18/19 following a sharp decline in equity markets amid month-end dollar demand.

A firm dollar overseas against its major rivals also put pressure on the rupee.

In fairly active trading at the inter-bank foreign exchange market, the domestic currency resumed weak at 50.90/92 a dollar against its previous close of 50.58/59 and moved between 50.87 and 51.32. It, however, closed at 51.18/19, a steep fall of 1.19 per cent over its last close.

Forex dealers said the rupee came under heavy selling pressure as equity markets displayed distinctly weak trends after last week’s strong rally.

The benchmark Sensex on Monday ended lower by 480.35 points or 4.78 per cent after a gain of 1081.81 points or 12.06 per cent last week.

Asian indices also closed the day with sharp falls due to last Friday’s steep decline on Wall Street as Washington rejected the restructuring plans for automakers.

Month-end dollar demand from oil refiners as well as other importers for their import payments also weighed on the rupee. Expectations of fresh capital outflows after a drop in share values also weighed on the rupee.

Meanwhile, global crude oil prices fell below $51 a barrel in Asian trade.

The Reserve Bank of India, however, fixed the reference rate for the dollar at Rs. 51.08 and for the single European currency, euro, at Rs. 67.52.

Forward dollar

Rupee premiums on the forward dollar closed barely steady.

The benchmark six-month forward dollar premium payable in September ended hardly changed at 84-86 paise from 83-1/2- 85-1/2 paise last Friday and the far-forwards maturing in March closed at 128-130 paise.

In cross-currency deals, the rupee rose against the British pound sterling and the euro but tumbled against the Japanese yen. — PTI

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