Mar 14, 2008

Rupee Vs Dollar : Rupee ends 10 paise lower against US dollar

Rupee ends 10 paise lower against US dollar

Mumbai: After tumbling by 24 paise in morning trade, the Indian rupee recovered smartly but still ended lower by 10 paise at 40.43/44 against a dollar amidst a collapse in domestic as well as Asian stock markets, and softening of US currency worldwide. In see-saw trade at the Interbank Foreign Exchange (Forex)market, the local unit opened weak at 40.45/47 against last close of 40.33/34.

The domestic currency dipped further in late morning session to 40.59 a dollar on distinctly weak equity markets across the globe. Forex dealers said dollar buying by banks on behalf of oil refiners to their import requirements aided the weakness in rupee. The world crude oil prices yesterday set a record of 110.20 dollar a barrel in New York.

India imports nearly 70 per cent of its oil, which might further impact negatively on the economy which has already showed a sign of cooling down as industrial growth in January has fallen to 5.3 per cent against 11.6 per cent in the same month last year. Forex dealers said heavy dollar selling by exporters amidst the softening of US currency pulled the rupee upwards in later part of the day. The local unit even touched a high of 40.38 a dollar.

Recovery in rupee was also partly attributed to weak dollar overseas. Dollar touched a record 12-year lower against Yen while all-time low against euro yesterday in New York. However, the collapse of stock markets was so strong that rupee moved downward again to close the day at 40.43/44. Meanwhile, the benchmark Sensex ended sharply lower by 771 points, its sixth lowest fall, while most of the Asian markets also showed bearish trend at end today.