Panic grips forex traders, rupee falls by 19 paise

Already reeling under a cash dollar shortage scare, the rupee came under severe pressure after nervous operators rushed to cover short-dollar positions from the onset of business as overnight exit polls predicted a hung house and projected a depleted strength for the BJP-led NDA, a dealer said.

Customary month-end dollar demand and abrupt dollar gains overseas also weighed on rupee value, he added. “Political uncertainties over the outcome of the Lok Sabha polls will keep the rupee under pressure until a clearer picture emerges,” another dealer said adding, “month-end dollar demand will further compound rupee worries.”

The futures market was also active and forward dollars remained in discounts, but the easing of the cash dollar shortage has narrowed down the discounts across the board. In cross currency trades, the rupee remained depressed against euro and lost further heavy ground against the British sterling.