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Rupee hits new low at 46.05

Our Bureau

MUMBAI, Sept. 18

THE rupee plummeted by 25 paise to close at an all-time low of 46.03/05 to the dollar today. Some dealers hit the screens with quotes of 46.08 late in the evening though no deals were done. At 46.03/.05 the Indian currency has touched a fresh bottom sinc e touching an intra-day low of 46.08 to the dollar on August 11.

Dollars to fund oil imports triggered off the slide in the Indian currency. The rupee had closed at 45.7750/78 to the dollar on Friday and 45.68/69 on Thursday.

``Though OPEC has taken the decision to increase oil production, it has not allayed fears of rising oil prices in our markets. It is estimated that a $1-hike per barrel will switch on a $500-million outflow in the Indian markets,'' said the chief dealer of a private bank.

An expected $ 350 million of corporate inflows have not materialised and with the stock market losing 196 points today, dealers said the mood in the forex markets, at present, was bleak. Most banks had gone short on the dollar in anticipation of the expe cted inflows and were now rushing to cover their exposures.

The RBI kept off the markets. Dealers believe that it is adopting a wait-and-watch policy having ``exhausted most of its instruments of intervention.'' Another dealer said: ``The Nasdaq has fallen and with the Asian markets also faring badly, the Indian currency may depreciate further.''

The rupee had stayed stable for some time at 45.60-.75 to the dollar towards August-end and the first week of September and had even appreciated to 45.59 on September 13. It had traded at 45.6325/6375 to the dollar on September 14 and in the past four da ys had slipped 37 paise.

According to Mr Tarun Mehrotri, Treasurer, HSBC: ``The rupee had stabilised for some time but since then there has been some movement in the external sector with oil prices at a ten-year high and developments in the Middle East adding to the uncertainty. '' The dollar continued to be strong against other currencies. ``Stock markets in both developed and developing countries have fallen sharply indicating capital outflows,'' he added.

Mr Ashish Parthasarthy, head - trading, treasury and capital markets, HDFC Bank, said: ``For the past two days, markets had been nervous watching for developments on the oil front and if there is no significant step by the RBI to curb the rupee depreciat ion, it may even touch 46.25-.50 to the dollar in the near future.''

Forward premia rose with the high spot rates. The six-month forward premium closed at 5.6 per cent (5.25 per cent) and the 12-month forward premium closed at 5.25 per cent (4.94 per cent).