Money & Banking

Rupee weakens on oil price surge

| | Updated on: Feb 24, 2011

After showing resilience for the past four to five sessions, the rupee weakened by around 37 paise due to the surge in oil prices and concerns over the political crisis in Libya.

The rupee opened at 45.24 and closed at 45.50, against the previous close of 45.12/13. According to a forex dealer with a public sector bank, the rupee was expected to touch 46. But dollar inflows related to the Reliance-BP deal, had buffered the rupee.

“Today, with oil crossing $100 per barrel dollar strengthened and there was panic short-selling in the rupee. Exporters were frantically looking for covering their positions,'' the dealer said.

In the overseas market the dollar was strong because of risk aversion. In the forward premia market the six-month closed at 6.42 per cent and the one-year at 6.05 per cent.

“I expect the rupee to touch 46 in about one week's time because the weakness has been factored in only now,'' the dealer said.

Published on February 25, 2011

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