Rupee plunges 34 paise against dollar in early trade
The rupee on Tuesday fell by 34 paise to trade at a fresh six-week low of 60.50 against the U.S. dollar in early trade due to sustained demand for the American currency from oil importers amidst rising crude prices that may further push inflation. The price rise of essential food items like vegetables, fruits and cereals, pushed up inflation to a five-month high of 6.01 per cent in May.
Dealers said besides dollar’s gains against other currencies overseas, continued demand for the U.S. currency from oil importers, to meet their requirements after global crude prices soared to nine-month highs on tension in Iraq, mainly weighed on the domestic currency.
A lower opening in the domestic equity markets also put pressure on the rupee, they said. The rupee had slipped below 60-mark and closed sharply down by 39 paise at a six-week low of 60.16 against the dollar in Monday’s trade. Meanwhile, the benchmark BSE Sensex fell by 51.25 points, or 0.20 per cent, to 25,139.23 in early trade on Tuesday.