Date:23/06/2006 URL: http://www.thehindubusinessline.com/2006/06/23/stories/2006062301620600.htm

Back Rupee breaches 46-mark

Our Bureau

Mumbai, June 22

The rupee weakened against the dollar and breached the psychological level of Rs 46, on the back of heavy corporate demand. The domestic currency opened at Rs 45.94 and kept falling throughout the day to close at Rs 46.13. On Wednesday, the rupee ended Rs at 45.96. Dealers said that there was excessive demand for dollars from Reliance, L&T and other corporates, including oil companies. Some defence-related transactions also took place, they said. Globally, currencies like euro, pound, and yen lost over 80 basis points against the dollar. This was extended to the rupee, which began tracking the losses of the other major currencies. A dealer at a private bank said, "FIIs who were investing in emerging markets are now buying dollars. The bearish outlook on the rupee is reflected in the rise in the forward premia." Dealers said the rupee was likely to trade between Rs 46.13 and Rs 46.20 on Friday. In the forward premia market, the six-month closed at 1.25 per cent and the 12-month at 1.30 per cent .