Rupee weakens by 95 paise at 42.55/56 against USD this week

Mumbai, May 17 (UNI) The Rupee sharply fell over 95 paise against the US Dollar at 42.55/56, on sustained buying of dollars by the oil exporting companies in the currency market in the week ended May 16.

The partially convertible Indian rupee past over the level of 42 and hit a 13-months intra-day low at 42.92 against greenback, weakened about 132 paise on the concern of slow pace growth in industrial production, soaring annual inflation and record high global oil prices in the week, dealers said.

Nationalised as well as foreign banks were seen selling dollars, as demand of dollar from the oil companies remained high through out the week, which pulled down the local currency to its lower end, a senior dealer with a leading private bank said adding, ''Rupee went past over 42 per dollar level for the first time since April 2007, on Monday, after report came that the annual pace of growth in industrial output had came down to 3 per cent in March from 8.6 percent in the previous month.'' Reportedly, the demand created by Non Deliverable Forward (NDF) market dragged Indian currency down at a 13-month low against dollar, he said.

Oil prices, hitting record highs close to USD 127 a barrel, also posed strong cause for the weakening rupee against the dollar in the currency market as India imports 70 per cent of its oil and refineries are among the biggest buyers of dollars in the local market, dealers opined.

Dealers also maintained that the local unit tumbled sharply in the week and are expected to remain under pressure as data showing inflation at a new 3-1/2 year high had heightened worries about slowing growth, record oil prices and the risk of foreign investors withdrawing funds.

UNI PP SR SKB1845