The Indian rupee on Monday tumbled by 47 paise to close at a nearly 13-month low at 42.05/06 against the greenback following heavy dollar buying by oil refiners as crude oil prices remained firm.
Concerns over the widening trade deficit due to higher global crude oil prices and also sustained rise in inflation and steep fall in industrial production mainly weighed on the rupee, dealers said.
In fairly active trade at the Interbank Foreign Exchange (Forex) market today, the local currency resumed lower at 41.62/64 a dollar against previous close of 41.58/59.
It later fell sharply close at 42.05/06 a dollar. It touched a low of 42.11 during the intra-day trading to a level last seen on April 13, 2007 when the rupee ended at 42.51/52.High demand from oil refiners
Oil refiners were seen buying dollar in the wake of rising crude oil prices.
World crude oil prices eased but remained high above $ 125 a barrel in Asian trade today after spiking to a record $126.25 a barrel in intra-day trading at the New York Mercantile Exchange last Friday.
The rising oil prices was a main concern for traders, as this might led to demand for dollar, affecting the rupee sentiment.
Capital outflows in the last couple of days and expectation of more in the coming days due to sustained rise in inflation and sharp fall in industrial production also impacted the rupee.
However, a smart recovery in the benchmark sensex from the day's lower levels, somewhat helped the rupee to recover modestly at the fag end.Industrial production growth sank to 3% in March
Meanwhile, industrial production growth sank to 3 per cent in March 2008 from 14.8 per cent a year ago. Index of Industrial Production grew at 8.1 per cent in April-March 2007-08, down from 11.6 per cent in year-ago period.
The Reserve Bank of India on Monday fixed the reference rate for US dollar at Rs 41.68 and that for single European unit at Rs 64.13.
The rupee premiums on forward dollar ended sharply higher on fresh paying pressure from banks and corporates.
The benchmark six-month forward dollar premiums payable in October ended at 31-1/2 - 33-1/2 paise, higher from 23-1/2 - 25-1/2 paise on last Friday and the far-forward maturing in April also hardened to 52-1/2 - 54 paise from 44 - 46 paise previously.Cross currency trade
In cross currency trades, the rupee reacted downwards against the British Sterling and dipped further against the Euro and the Japanese Yen.
The rupee fell back sharply against the Pound Sterling to end the day at Rs 82.32/34 per pound from last close of Rs 81.03/05 per pound and declined further against the single European currency to Rs 64.96/98 per euro from last Friday's close of 64.27/30 per euro.
The Indian unit softened against the Japanese yen to close at Rs 40.45/47 per 100 yen from previous close of Rs 40.41/42 per 100 yen.