Rupee slumps to multi-month low

The Rupee on Wednesday continued to slide unabated, slumping to multi-month lows of Rs 46.53/55 per dollar due to sustained hectic dollar demand amid negligible supplies with the outlook distinctly bearish following a pull-out by foreign funds and rising crude oil prices.

Tumbling by another whopping 25 paise from overnight near six-month closing lows of Rs 46.28/30, the rupee has depreciated by a massive 66 paise in three trading sessions, gripped by nervousness at the Interbank Foreign Exchange market due to frenzied dollar demand from all quarters amid restricted supplies, dealers said.

The Rupee opened distinctly weak at Rs 46.42/44 per dollar.

Volatile stock market, month-end corporate demand and concerns on outflow of dollar by FIIs were the main reasons behind the steep rupee slide, a banker said.

Firm global crude oil prices at $71.86 a barrel in early Asian trade today due to lingering supply concerns also weighed heavily on rupee value, they added.

Foreign Institutional Investors (FIIs) showed equity shares worth $18.2 million on May 29 and a sharp injection of $56.2 million on May 26. FIIs have so far pulled-out a massive $1.6 billion in May.

Traders expect the rupee to remain under tremendous pressure due to usual month-end considerations, tight dollar supplies and absence of Central Bank interventions to arrest the slide. Exporters also kept a low profile in the market.

In cross currency trade, the Euro was quoted at Rs 59.76/79, Pound Sterling at Rs 87.43/46 and a Japanese Yen (100) at Rs 41.40/43.