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Re touches new low at 45.85/88

Our Bureau

MUMBAI, Aug. 10

AFTER a marginal recovery yesterday, the rupee today again lost 25 paise against the dollar, touching a new low of 45.85/88 to a dollar. The RBI kept away from the market.

In fact, the rupee has depreciated by about five per cent in the past four months. On April 4, the rupee traded at around 43.61/63, two days after the RBI had cut Bank Rate and CRR. Following that, the central bank announced several measures, including h iking the Bank Rate and CRR on July 21, but failed to prop up the rupee.

Today, the market began on a brisk note with some sellers and a huge number of buyers pulling the rupee to 45.68/70 and swiftly to 45.74/75, said Mr. Alok Sharma, Chief Dealer, Bank of America.

According to dealers, the day was marked by heavy and widespread demand from corporates and importers with the only dollar supply coming from inter-bank long positions which were few and far between.

``The rupee was looking to settle at 45.70 to the dollar but once this level broke, panic set in with almost everyone turning buyers,'' said Mr. Ravi Kumar, Chief Dealer, ABN Amro.

The RBI was not seen to have intervened a great deal with Bank of India seen buying dollars early in the day. However, towards close, State Bank of India is said to have sold dollars, dealers said.

``There were some banks which were short hoping for some kind of intervention from the RBI which did not happen. This added to the general panic and rush for dollars,'' said a dealer in a nationalised bank.

Dealers said that the rupee will definitely test 45.90 levels on Friday. ``We are watching to see what the Reserve Bank will do tomorrow,'' said a chief dealer in a private bank. The repo rates in the inter-bank money markets are also expected to be mark ed higher by the central bank tomorrow, which will cause forward premia to rise.

The forward premia tracked the spot rupee, closing high after opening low. The one-month forward premia closed at 6.93 per cent (6.56 per cent), the six-month forward premia closed at 4.83 per cent (4.54 per cent) and the 12-month forward premia closed a t 4.6 per cent (4.4 per cent).