Rupee falls to 32-month low

The rupee fell to a 32-month low as importers bought dollars on expectations that the rupee will weaken further. The domestic currency opened lower at 51.05 and fell to a low of 51.40. It closed at 51.35, 45 paise lower from the previous close of 50.90/91. These levels were last seen in March 2009. According to a senior treasury official, the lack of clarity in the Euro zone about the support to the debt ridden nations as well as the negative domestic equity markets are putting pressure on the rupee. “There is no single positive factor in favour of the rupee at this stage,” he said. The fear that India may not achieve the fiscal deficit and growth targets is also adding to the negative sentiments about the rupee as well as equities, said dealers. While there was some talk that the RBI may have asked public sector banks to sell dollars, there were no visible signs of any intervention. But this prevented traders from taking large positions in dollar, dealers said. In the overseas market the euro gained against the dollar, which led to some dollar selling in the domestic market as well. The rupee is likely to remain weak in the near term and may trade at 50-52 levels, said dealers. —