The Hindu Business Line : Rupee at 3-year low

Continuing its downward slide, the rupee hit the lowest against the US dollar in three years on Wednesday but recovered towards the end of the session. For the third day in a row, the rupee declined due to the volatile equity market and strong month-end dollar demand by oil companies, said dealers. The rupee opened lower at 46.35. It then touched a low of 46.54/55, which was last seen in June 2003. At these levels, there was selling seen by public sector banks. "This could have been induced by the central bank. Exporters also came in to sell the dollar, as these are good levels to sell the dollar," said a dealer with private bank. The rupee then recovered to end at 46.35/36 against the dollar, about eight paise from the previous close of 46.28. According to dealers, the strong GDP data, which said that the economy grew by 9.3 per cent in the first quarter of 2006, helped the rupee recover. The dollar was steady against other currencies. Most dealers are of the opinion that the rupee is likely to remain in the range of 46-46.5 for some time. Following the spot rupee movement, the forward premia also came off sharply in the morning, but recovered in the latter half of trade. The six-month closed at 0.6 per cent (0.66 per cent) and the 12-month closed at 0.76 per cent (0.82 per cent).