Rupee drops to five year low at 46.95 per US dollar

Mumbai, Sep 29 (UNI) The Rupee today nosedived by 40 paise to settle at a nearly five year low at 46.95 against the US dollar as the stock market ended in red and month-end dollar demand from oil firms dragged heavily even as intervention by state-run banks offered little respite.

The partially convertible Rupee opened at 46.83/85 per dollar, off an intraday 47.11, which was its lowest since June 2, 2003, and 0.9 percent weaker than 46.54/55 at the close last Friday.

''Since tomorrow is bank closing, the spill-over of the month-end dollar demand from commercial banks and a negative stock market pushed it below the psychological (47 to a dollar) level,'' a leading forex dealer said ''We saw sporadic presence of state-run banks selling dollars but the demand was too high,'' he added.

The currency and bond markets will be shut on Tuesday for half yearly book-closing of banks.

World stocks lost heavily on Monday, led by sharp falls in Europe as three European banks became the latest casualties of spreading credit woes, forcing partial nationalisation and overshadowing Washington's bailout plan.

While the Reserve Bank of India (RBI) today fixed the reference rate for US dollar at Rs 46.94 per unit, up by 51 paise against its previous rate of Rs 46.43 per dollar.

The reference rate for Euro was also up by 16 paise at Rs 67.79 per unit from earlier rate of Rs 67.95 per unit, a RBI release stated.

However, the six-month and annualised forward dollar premium was quoted lower at 0.57 (1.24) per cent and 0.66 (1.08) per cent respectively.

The Rupee ended lower at 67.34/36 (67.96/98) per unit against the Euro. It closed at 84.60/62 (85.50/52) per unit against the Pound Sterling and at 44.16/18 (44.14/16) per hundred units against the Japanese Yen.

UNI AR OBB NP1907