Rupee tumbles against US dollar over the week

Mumbai, Aug 11: The rupee tanked against the US dollar by over 24 paise in the past week shadowing the losses in Dalal street brought in by the so-called subprime mortgage meltdown in US market and mirroring the impact of revised ECB norms installed by Reserve Bank to check liquidity.

During the week, the local unit was highly volatile and slipped marginally to 40.79/80 against the US currency on Wednesday.

However, the unit recovered in following consecutive days and settled at 40.64 per US dollar.

According to dealers, the revised ECB norms, prohibiting corporates from remitting ECBs over USD 20 million in India, reflected well on forex market pushing the rupee in to a highly volatile mood.

The central bank had also hiked the ceiling of MSS bonds by nine points recently, enabling the regulator to offload upto Rs 1,50,000 crore as against the earlier set limit of Rs 1,10,000 crore.

Early this week, the home currency had opened at 40.50/51 per USD on Monday and touched the week's high of 40.35/36 per USD during the intra-day trade on Tuesday.

''The rupee may further depreciate and is likely to open around 41.00 per USD on Monday considering the overall weak trend in global financial markets,'' said a senior forex dealer with a bank.

On the other hand, the inflation rose to 4.45 per cent over the week ended July 28 from 4.36 per cent in the previous week reportedly spurred by costly food articles and manufactured products pushing the inflation up despite a set of liquidity controlling measures like the hike in Cash Reserve Ratio (CRR) by 0.5 per cent.

Meanwhile, the inter-bank call rates lowered slightly over the week as six month premia closed at 1.71 (as against 1.90 on Monday), while 12-year premia ended at 1.78 (1.94).

UNI