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Our Bureau

Mumbai, Sept. 29 The meltdown in the equity market and strengthening of the dollar in the global markets had its impact in the local currency market on Monday. The rupee breached the psychologically important 47-mark against the dollar in intra-day trade and touched 47.10. The rupee had last crossed 47 level in July 2006.

Dealers said rupee lost 45 paise as importers and oil companies bought dollars to meet the month-end demand.

The domestic currency opened weaker at 46.82/83 and closed at 46.97/99, against the previous close of 46.54/55.

“The confidence in the dollar has increased on account of the $700-billion US bailout package,” said Mr Dharmakirti Joshi, Director and Principal Economist, Crisil.

There is a mismatch between dollar demand and supply. On one hand, the FIIs are withdrawing money from India reflected in the over 500-points fall in stock markets and on the other there is an increasing demand for the dollar, added Mr Joshi.

The RBI intervened at 47.10 levels which helped the domestic currency recover some of its losses, said a dealer with a private bank. On a conservative estimate, the RBI sold about $1 billion through nationalised banks, added the dealer.

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