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Rupee closes at record low of 44.72/$

The Indian rupee sank to a record low of 44.725 to the dollar on Wednesday at close, marking a third day of losses seen as unusually large for a currency convertible only on the current account.

The rupee opened nearly steady at Rs 44.67/68, came under Pressure, immediately after opening on heavy import dollar covering coupled with short supply and declined sharply by touching the new all-time low.

The State Bank of India, or SBI, which supported the rupee by resorting to dollar-selling for the last few days, reportedly bought dollars in the morning, resulting into a sharp decline in the rupee' value, dealers said. ''The SBI's reported move, changed the market directions," said a forex dealer at the public sector bank.

Tracking the SBI's move, some nationalised banks and foreign banks also started buying the greenback which in turn pushed down the rupee to Rs 44.71/72 level during the morning session itself, dealers said.

The currency, then came under severe pressure in absence of SBI's support in the afternoon and closed at an all-time low Rs 44.7230/7350, as compared to Rs 44.67 of previous day.

Dealers said export sales may be triggered if the market perceives the rupee's losses have been checked, and may be followed by importers booking profits on hedges.

Forward dollar premia opened higher in anticipation of import demand and paying by banks on concerns over short-term liquidity.

The rupee's recent fall has been triggered by mounting dollar demand from importers in a market which has seen dollar supplies from foreign funds dry up reflecting their sales in the stockmarkets.

Forward premiums were sharply up tracking the spot rupee and the tight liquidity conditions in the money market.

Additonal inputs: UNI

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