Mumbai: The rupee on 10 August ended at 40.63/64 against the US currency, cheaper by 11 paise from previous close largely due to a worldwide meltdown in equity markets, affected by renewed worries about the US subprime mortgage sector.
In volatile activity at the Interbank Foreign Exchange (forex) market, the local currency fluctuated in a range of 40.6100 and 40.6950 during the day after resuming sharply lower at Rs 40.67/68 per dollar.
There was some dollar demand from banks as well as oil refiners in the exchange maket, forex dealers said.
The rupee, which showed signs of a rally the previous day, came under pressure after the stock market went into a tailspin on worries of a fallout from the US subprime problems, they added.
The benchmark Sensex this morning tumbled by about 529 points before settling with a loss of 232 points.
Though the rupee was well supported by exporters repatriating profits, traders reduced rupee holdings in the light of stocks’ crash in Asian markets, causing global risk aversion, a leading banker said.
Traders expected more pressure on the rupee in view of the governments restrictions on external commercial borrowings (ecbs) and the central bank’s decision to raise the ceiling on market stabilisation bonds (MSS), analysts feel.