The Indian rupee ended at 32-month closing low by slipping further by 37 paise to finish at 50.67/68 against the American currency in view of persistent dollar demand from banks and importers on the back firm dollar in the overseas market amidst weak equities.
The rupee resumed lower at Rs 50.40/41 per dollar on the Interbank Foreign Exchange, as against its previous close of Rs 50.30/31 per dollar, and dropped further to Rs 50.74 per dollar before ending at 50.67/68 per dollar. Previously, it had ended at 50.70/71 on March 31, 2009.
PERSPECTIVE: Why is the rupee falling? The domestic currency hovered in a range of Rs 50.40 and Rs 50.74 during the day. Sustained dollar demand from banks and importers in view of the higher dollar in the New York market mainly affected the rupee value against the American currency, a forex dealer said.
The US dollar extended its gains against the euro in the New York market yesterday following reports that the sale of five-year Italian government bonds came at the highest cost to the government since 1997.
Traders were also worried that a new technocratic government in Rome still faces daunting challenges in insulating the euro zone's third-largest economy from the region's debt crisis, which weighed on equities and influenced safe-haven flows to the greenback and US treasury bonds.
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