Panic prevailed on Friday in the foreign exchange market. The rupee tumbled to a four-month closing low of 45.60/62 per dollar following heavy all-round dollar demand, triggered by concerns over the pace of reforms after Left parties demanded the scrapping of the disinvestment policy of the NDA government.Nervousness once again gripped the forex market as wary operators rushed to cover dollar positions from the onset of business despite a positive start at 45.23/26 per dollar.Fears of a slowdown in the economic reforms process sent the rupee hurtling down to a low of 45.68/70 in late afternoon deals, before recovering somewhat to finish at 45.60/62, a whisker away from 45.6250/6350 logged at the close of trade on January six, dealers said. The rupee declined by a whopping 35 paise from overnight closing levels of 45.26/29 after nervous participants scrambled to cover dollar positions on renewed worries that the reforms process could take a backseat, they added.The Left parties, including the CPM and CPI demanded the disbanding of the disinvestment ministry immediately before the formation of the government at the Centre.Though Congress had received a mandate in the Lok Sabha polls, concerns remained over the reforms process with the result near-panic operators rushed to cover short-dollar positions in a shallow market. Surging global crude oil prices and interest rate uncertainties also weighed heavily on rupee value, a forex dealer said.
