Rupee loses 12 1/2 paise against dollar

MUMBAI, JULY 20. Heavy all-round dollar demand sent the rupee into a tail-spin against the U.S. currency today and the Indian unit logged a record low closing quote of Rs. 44.90/91 a dollar, a whopping 12-1/2 paise decline from Wednesday's finish of 44.7750/7800.

In fairly volatile trading at the inter-bank foreign exchange market, nervous operators scurried to cover dollar positions, resulting in the rupee tumbling down from the very onset of business.

After breaching the 44.80 a dollar barrier, the rupee later pierced through the 44.90 psychological barrier and touched the intra-day low of 44.92/93, within striking distance of historic low (intra-day) of 44.92/95 recorded on June 8, as banks, corporates and importers rushed to cover dollar positions, dealers said. Near nervousness gripped the forex spot trading, particularly in the morning, as waves of dollar short-covering sent the rupee reeling under pressure, they added.

``Uncertainty that the coalition government at the Centre may be toppled after three senior Shiv Sena ministers resigned induced nervous participants to cover their short-dollar positions, resulting in the rupee hurtling down to fresh record lows against the U.S. currency," a forex dealer said.

The rupee has been under considerable pressure in the last few days due to genuine demand for dollars and the current turmoil has further aggravated the situation.

The Indian currency had plunged to life-time low of 44.92/95 in early intra-day trading on June 8.