Dollar demand pulls down rupee further

By Our Special Correspondent

MUMBAI, MAY 30. The Indian rupee closed at a record low of 44.57/58 against the U.S. dollar in the inter-bank foreign exchange market here today. It opened in the morning at 44.51/52 against Monday's close of 44.49/50 and moved down to a low of 44.58/59 before closing at 44.57/58 on corporate dollar demand.

With short supply of dollars and excess corporate demand, mainly from a major government oil company, the rupee slipped by eight paise. A State-run bank was seen selling dollars in the market since morning and its continuing presence is seen as a signal from the Reserve Bank of India to hold the rupee slide temporarily.

``This might prompt exporters to sell dollars after the rupee stabilises for a day or more,'' said Mr. S. Srinivas, senior consultant, e-Mecklai, a leading foreign exchange dealing firm.

Also, the measures imposed by the RBI should correct the dollar slide in the coming days. The difference in value of the Indian rupee between off-shore and domestic markets is narrowing down, indicative of decreasing volatility in the currency.

``Though State Bank's action did help a little for the rupee to recover, its continued presence in the market should help attract exporters into the market,'' said Mr. Ravi Menon, Pampa Financial and Commercial Services.

The benchmark six month premium is at the lower end at 2.63 per cent against its earlier close of 2.79 per cent. Mr. Srinivas added that premiums were expected to remain range-bound in the coming days.

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Section  : Business
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