Rupee dips on global worries

Moves in a wide range of 49.88 and 50.60

MUMBAI: The rupee closed at yet another record low of 50.20/21against the dollar on Thursday due to exodus of foreign investments and descending equity markets. It closed at 50.02/03 on Wednesday.

Dealers said heavy dollar selling caused high level of volatility at the interbank foreign exchange market even the rupee moved widely in a range of 49.88 to 50.60 during the day.

They said unstoppable capital outflows and bearish local stocks were the main factors for the rupee’s downfall. It resumed weaker at 50.50/51 a dollar.

Sustained dollar demand from importers amid negligible supplies also weighed on the rupee sentiment, they added.

Fears of more portfolio outflows from emerging economies in the light of the current financial crisis, which seems to be blowing out of control, heightened worries that it may pull global economy deeper into recession.

There was a virtual meltdown in global equity markets on Thursday after the release of a dismal U.S. economic data and the Federal Reserve lowered the US growth forecast for 2009.

The RBI fixed the reference rate for the dollar at Rs. 50.52 and for the single European currency at Rs. 63.12.— PTI

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