Rupee hits a 2-year low of 46 against the US dollar
15 Sep 2008
Mumbai: The rupee tumbled to a two-year low of 46 against the US dollar - its weakest since 2 October 2006 - in early trading on the forex market here today. The domestic currency was holding at 45.95/96 in the evening trade, 0.4 per cent lower than Friday's close of 45.75/76 despite the dollar's weakness.
The rupee's fall has been aided by heavy dollar demand from importers and losses in the local stocks but fears of possible RBI intervention kept the rupee from falling further, sources said.
The stock market was at its worst on Monday with the Bombay Stock Exchange Sensitive Index falling 772 points to their lowest close in two months, as jittery investors braced for more foreign withdrawals after Lehman Brothers filed for bankruptcy protection.
Foreign funds have pulled out $8 billion from Indian shares this year, compared with record inflows of $17.4 billion in 2007.
The rupee resumed stronger at 45.53/55 a dollar against its last close of 45.75/76 a dollar and later touched 45.46 level, buoyed by a sharp fall in dollar against basket currencies.
The rupee, however, later fell by 25 paise to 46 against the dollar in early trade.
Forex dealers said the stock market plunge and fairly good dollar buying by some banks weighed on the rupee sentiment in early trade.
Banks bought dollar after the rupee appreciated to 45.46 level immediately after resumption of trading, they pointed out.
The RBI kept the reference rate for the US dollar at Rs45.94 and for the Euro at Rs65.95. The corresponding rates for the previous day (12 September 2008) were Rs45.77 and Rs64.20 respectively.
The reference rate for the the single European unit was fixed at Rs65.95 per euro against Friday's Rs45.77 per dollar and Rs64.20 per euro respectively.
Based on the rates for US dollar and middle rates of the cross currency quotes at noon, the RBI fixed the exchange rates of the British pound and Japanese yen against the rupee at Rs82.84 per pound and Rs43.42 per 100 yen respectively,
The Reference rate is based on 12 noon rates of a few select banks in Mumbai and the SDR-rupee rate will be based on this rate, RBI said in a release.
