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Rupee closes at record-low of Rs 48.31/$

Steady dollar demand from banks drove the rupee to yet another record-low close of Rs 48.30/31 per dollar on Wednesday in moderately active but slightly nervous trade at the Interbank Foreign Exchange market.

Surpassing its earlier lowest-ever finish of Rs 48.27/28 logged Tuesday, the rupee fell by three paise following a fresh round of dollar-demand from banks, mainly public-sector units, dealers said.

The rupee opened cautiously weak at Rs 48.27/28.

State-run banks started bidding the dollar in early trade and pushed the rupee down to 48.2950/3050, leading other banks to cover short-dollar positions, dragging the rupee down to new record-lows at the close, dealers said.

However, the rupee's decline was gentle and orderly, devoid of any excessive speculation, they added.

A section of the market felt that public-sector banks were buying dollars at the behest of the central bank to give the rupee the competitive edge for exporters, as the currency was currently overvalued vis-a-vis other units in the region.

Others said it was genuine corporate demand for the dollar that was weakening the rupee.

Continuing cross border tensions seen keeping the rupee under pressure but there is no cause for concern as the central bank will intervene at the appropriate time to prevent any steep fall in the rupee value, a dealer said.

Reserve Bank of India governor Bimal Jalan said recently that RBI would support the rupee whenever there is a need.

Traders expect the rupee to remain under pressure Thursday, but fears of dollar-selling intervention by the RBI would prevent any sharp rupee fall.

In cross currency trades, the rupee weakened against the euro and declined against the British sterling.

The domestic unit ended lower against the single European currency at Rs 43.10/12 per euro from Tuesday's finish of Rs 42.91/93 after opening around Rs 43.11/13.

It eased against the sterling to close at Rs 69.51/53 per pound from Rs 69.43/45 following a soft start at Rs 69.52/54 per pound.

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