Date:30/05/2006 URL: http://www.thehindu.com/2006/05/30/stories/2006053009591700.htm

Business

Rupee crosses 46/$ mark

MUMBAI: Breaching the 46 a dollar barrier, the rupee on Monday slumped to 5-1/2 month closing low of 46.09/10 a dollar, pulled down by hectic month-end dollar demand amid a resurgent dollar overseas with the outlook remaining uncertain due to firm crude oil prices and a slowdown in foreign institutional investment inflows. Plunging by a steep 20 paise from last Friday's close of 45.88/90, the rupee came under renewed severe pressure after the weekend dollar rebound overseas fuelled heavy dollar short-covering from foreign banks, custodians for FIIs.

Customary month-end dollar buying by state-run banks for vital oil and defence-related imports amid strained supplies further aggravated rupee woes, dealers said.

A firm opening at 45.8250/8350 a dollar notwithstanding, the rupee tumbled to 45.96/98, then pierced through the 46 a dollar barrier and settled at 46.09/10 in the absence of central bank intervention to halt the slide.

The rupee had last ended at weaker levels of 46.10/11 on December 12, 2005.

The Reserve Bank of India fixed the reference rate for the U.S. currency at Rs. 45.97 and for the single European unit at Rs. 58.58. — PTI