Rupee hits record low of 51.12 against dollar

27 Feb 2009, PTI

MUMBAI: Sliding for the fifth day in a row, the Indian rupee on Friday breached the 51-mark for the first time ever against the greenback as the local currency lost 66 paise on sustained strong demand for the US dollar from foreign banks and oil importers amid weak stock markets.

The US dollar ended sharply higher against the rupee at Rs.51.12/14 per dollar and the Pound Sterling also finished higher at Rs.72.49/51 per pound at the close of the Interbank Foreign Exchange (Forex) market on Friday.

Dealers in foreign exchange said that the stronger dollar abroad gave an opportunity to the foreign banks to buy American currency in the local market and sell it in offshore non-deliverable forward contracts for immediate profits.

In the overseas market, the dollar gained against its major rival euro but slipped against Asian competitor yen.

The rupee on Thursday only set a fresh low record of 50.46 on sudden surge in demand for dollar. The previous low record of the domestic currency was recorded on last December 2 when it touched the intra-day high of 50.60. Including today's fall of 66 paise, the rupee had slumped by a whopping 151 paise or 3.04 per cent in the straight past five sessions.

Continued selling by Foreign Institutional Investors (FIIs) in equity markets also weighed against the rupee. They have pulled out nearly USD 1.6 billion in the current calender year so far, dealers said. Weakness in equity markets also put pressure on domestic unit, they added.