Re inches closer to 48/$

Hits new low on huge demand for the greenback from FIIs, importers.

The rupee fell to a record 2008 low today and closed in on the 48 mark against the dollar as banks bought the greenback to meet foreign funds’ demand following a sharp fall in local shares, dealers said.

The Indian currency ended at 47.81 to a dollar, down 1.52 per cent compared with 47.06 last Friday. The Indian unit touched an intraday low of 47.84, levels last seen in January 2003. “Demand from FIIs due to a sharp fall in shares and (demand) from importers made the rupee weak today,” said a dealer of a UK bank.

“RBI must have sold heavily today. But whatever they sold got absorbed in the market in no time,” said a dealer at a state-owned bank.

The Bombay Stock Exchange’s 30-share Sensex ended down 5.78 per cent, while the National Stock Exchange’s 50-share Nifty ended down 5.66 per cent today. Local shares ended at a two-year low today.

Local shares have been tracking weak indices globally. Risk aversion from equity markets has been rampant, especially in Asia, giving a boost to dollar.

Today, among Asian currencies, the dollar rose over 4 per cent against the Korean won to touch a six-year high.

The dollar touched over a two-year high against the Indonesian rupiah, an eight-month high against the Taiwan dollar and a 17-month high against the Philippine peso.