Mumbai, Nov 18: The rupee today plunged to 32-month low of sub-51 level against dollar on persisting demand for the US currency from banks and importers.
At the interbank foreign exchange market, the domestic currency closed down 44 paise at 51.34/35 a dollar. It had ended at 51.49/51 per dollar on March 17, 2009.
Sustained dollar demand from banks and importers in view of dollar firmness in overseas markets and weak domestic equity markets mainly affected the rupee value, a dealer said.
The global scenario is also affecting the rupee as the eurozone debt issue is still a major hindrance, Abhishek Goenka, CEO, India Forex Advisor said.
The pressure on the rupee will continue largely due to internal issue faced by the economy, he added.
Market was abuzz with speculation that the Reserve Bank has probably asked public sector banks to release dollar to arrest the fall in rupee, dealers said.
The rupee resumed lower at Rs 51.05/06 per dollar as against last close of Rs 50.90/91. It dropped further to Rs 51.41 a dollar before ending at 51.34/35 a dollar.
The domestic currency moved in a range between 51.00 per dollar and Rs 51.41 per dollar during the day.
“Being a net importing country, weak rupee will impact adversely the economy. Majority of corporate earnings (in the previous quarter) were not up to the mark, due to losses incurred in the treasury,” Goenka said.
Pramit Brahmbhatt, CEO, Alpari Financial Services (India) said, “Looking at the strong dollar one can expect rupee to trade over 51.50 levels.”
Meanwhile, the BSE benchmark Sensex declined further by 90 points or 0.55 per cent.
The dollar index was down by over 0.64 per cent against a basket of currencies while global crude oil was trading above USD 99 a barrel in European market today.
The rupee premium for the forward dollar closed lower on fresh receivings by exporters.
The benchmark six-month forward dollar premium payable in April settled down at 91-93 paise from 110-112 paise yesterday and far-forward contracts maturing in October finished sharply lower at 157-159 paise from 184-186 paise previously.
The RBI fixed the reference rate for the US dollar at Rs 51.3530 and for the euro at Rs 69.2589.
The rupee dropped further against the pound sterling to end at Rs 81.32/34 from Rs 80.22/24 yesterday and declined to Rs 69.45/47 per euro from Rs 68.61/63 previously.
It, also tumbled against the Japanese yen to Rs 66.91/93 per 100 yen from overnight closing level of Rs 66.19/21.