Rupee Swoons To New Low

The rupee touched a new intra-day low of 46.45 against the dollar on Friday on the back of increasing corporate demand and the meltdown across all global markets. Further, apprehensions that a flare-up in West Asia could drive up global crude oil prices also took its toll.

The currency opened weak at 46.29/30 and soon hit its new intra-day low against the previous 46.41 hit on September 19. The rupee, however, recovered partially to close at 46.35/37.

Government security prices crashed by about 50 paise at the short-to-medium end while call rates moved up by a percentage point to 11 per cent on Friday.

With this, gilt prices have fallen by close to 80 paise and overnight rates have risen by two percentage points over the last two days.

Bond prices swung both ways yesterday, tracking the rupee (the local currency slumped to an intra-day low of 46.45 yesterday). Dealers said the movement of gilt prices will depend on the oil price scenario and, until the uncertainty is over, traders will prefer to stay liquid in shorter maturities.

First the Standard & Poor