Rupee closes 55 paise down, at new 2-year low

The rupee on Monday fell sharply by 55 paise to close at fresh two-year low of 47.81/82 against the U.S. currency as investors rushed for the dollar as a safe haven investment amid global worries.

Renewed dollar demand from importers and some banks and weakness in equities also weighed on the rupee, dealers said.

Failure in announcing a rescue for debt-ridden Greece by European Finance Ministers in a meeting last Friday hit the high risk assets like euro and equities, as traders went for dollar as a safe haven investment, leading to a smart rise in dollar overseas, traders said.

Dollar index was up by about 0.7 per cent against its six major rivals in Europe.

At the Interbank Foreign Exchange (Forex) market the domestic unit opened bearish at 47.55/56 a dollar from last close of 47.26/27.

It gradually declined further to a low of 47.8350 before ending at 47.81/82, level not seen since September 29, 2009 when it had closed at 48.10/11.

Fresh dollar demand from banks and importers, in view of dollar firmness in overseas markets, mainly affected the rupee value against the American currency, a dealer said.

The RBI fixed the reference rate for the dollar at Rs. 47.7920 and the euro at Rs. 65.3544.

The rupee premium for the forward dollar dropped on fresh receipts by exporters. The benchmark six-month forward dollar premium payable in February dipped to 64-67 paise from last weekend’s close of 79-1/2-81-1/2 paise and far-forward contracts maturing in August tumbled to 100-104 paise from 125-127 paise previously.

The rupee reacted downwards against the pound sterling to end at Rs. 75.13/15 from last Friday’s close of Rs. 74.64/66 and also moved downwards to Rs. 65.33/35 per euro from Rs. 75.21/23 previously. It also fell back against the Japanese yen to Rs. 62.35/37 per 100 yen from last close of Rs. 61.64/66.