Rupee dips below 41 per for first time in 9 months

The rupee breached the 41-level against the greenback for the first time in nearly nine months at 41.35/36 on Wednesday, as demand for the US currency from oil firms multiplied after global crude hit yet another high. The rupee last closed above the 41-level at on August 16, 2007, when it settled the day at 41.36/37 a dollar. In active trade at the Interbank Foreign Exchange market, the local currency resumed weak at 41.01/92 a dollar from its last close of 40.94/95 a dollar. It moved in a range of 40.9900 and 41.4075 before ending at 41.35/ 36 following sustained demand from banks and corporates.

Forex dealers said oil companies were seen taking up dollar positions in the light of soaring oil prices in the global market. The rupee premiums on forward dollar ended higher due to fresh paying pressure from banks and corporates. Dealers said the sky-high oil prices caused fears of a widening trade deficit, exerting pressure on state-owned oil companies as well as a further slowdown in portfolio inflows.