Rupee plummets 31 paise to fresh one-year low

Back in circulation: A handicapped person does his bit on the street of Kolkata for keeping rupee in circulation and healthy. He is among hundreds, who everyday provides changes and re-issues soiled currency notes all over the country at a 10 per cent margin. The rupee today edged higher against the dollar after showing a streak of volatility and weakness. It had depreciated by over 48 paise in the first three days of the week following strong foreign fund outflows from the stock market. It bounced back on Friday as the Sensex rallied to close with a gain of 379 points. Photo: Arunangsu Roy Chowdhury/Kolkata, June 02, 2006.

The Indian rupee tumbled by 31 paise to a fresh one-year low of Rs 46.50 per US dollar in early trade on Thursday, extending its downward spiral against the American currency on sustained dollar demand from banks and importers in view of dollar firmness in overseas markets.

The rupee resumed lower at Rs 46.26/27 per US dollar on the Interbank Foreign Exchange here today, as against its previous close of Rs 46.19/20 per dollar, and moved down further to Rs 46.50 per dollar before quoting at Rs 46.46/47 per dollar at 1030 hours.

Persistent dollar demand from banks and importers on the back of a higher dollar in the New York market mainly affected the rupee value against the American currency, a forex dealer said.

In New York, the dollar extended its gains on Wednesday after Federal Reserve Chairman Ben Bernanke said he wasn’t worried that the increase in inflation earlier this year would persist, but he didn’t elaborate on whether or how the central bank could ease the rate of price rise further.