Rupee dips below 46 after 2 years

The losses in the stock market and heavy demand for the dollar from importers knocked the rupee past 46 against...

The losses in the stock market and heavy demand for the dollar from importers knocked the rupee past 46 against the dollar for the first time in two years. Despite a steep fall in crude oil to around 94 per barrel, the Indian currency ended at 46.05/06 against the dollar, off a low of 46.08, its weakest since September 20, 2006. It was 0.65 per cent weaker than Friday8217;s close of 45.75/76. The rupee slumped on concern investors will dump riskier assets, including emerging-market securities.

Dealers said the Reserve Bank of India intervened in the market, selling dollars through state-run banks to halt the rupee8217;s sharp fall, but that did not provide much respite as the quantum of intervention was not too large.

The rupee has shed over 4 per cent in September, taking its losses in 2008 to 13.90 per cent. 8220;The rupee8217;s fall has sent the calculations of exporters and importers haywire,8221; said a dealer.

METALS PLUNGE: Metals and crops also dropped, prompting a 5 per cent slump in the S038;P GSCI Index of 24 commodities. Lehman Brothers was suspended from energy and commodities trading in London. Analysts said the 158-year-old bank8217;s demise 8212; along with the planned sale of Merrill Lynch 038; Co. to Bank of America Corp 8212; could prompt another sell-off in commodities as the banks and investors race to unwind positions on fears that a deepening economic crisis will further erode demand for raw materials.

Aluminium sank more than 3 per cent to its lowest since end-January, copper neared its eigh-month low while zinc plummeted almost 10 per cent at one point. Nickel fell to its lowest in more than a month.

CRUDE DOWN: Crude oil prices also fell to a seven-month low and gasoline tumbled after Lehman Brothers Holdings Inc filed for bankruptcy and refineries along the Gulf of Mexico escaped major damage from Hurricane Ike.

Light, sweet crude for November delivery fell 4.87, or 4.82 per cent, to 96.38 a barrel on the New York Mercantile Exchange, after earlier dropping to 94.41, the lowest level since February 14. A close at that level would be oil8217;s first settlement under 100 since March 4.