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Rupee at record low of 55.35 despite RBI steps

Mumbai: The rupee today plunged to fresh low of 55.35 per dollar in late afternoon trade despite RBI`s measures to curb the persistent fall. At the interbank foreign exchange market, the domestic unit tumbled by 32 paise to trade at fresh all-time low of 55.35 due to strong dollar demand from importers after the US currency strengthened in overseas markets.

The rupee had resumed higher at 54.60 per dollar as against the last closing level of 55.03 per dollar. However, moving in line stock markets, the domestic currency erased all the gains to trade at all time lows in late afternoon after increased worries over eurozone crisis, dealers said. The BSE benchmark Sensex index fell by 151.80 points to trade 16,031.46 points in pre-close session.

The Organization for Economic Development and Cooperation (OECD) today said the eurozone crisis has intensified and poses the most serious risk to muted recovery in the global economy. The euro weakened against the dollar and yen in Asian trade over eurozone worries. Analysts said that more pressure may be in store due to continued uncertainty over Greece`s fate within the euro-zone and jitters over the region`s banking system.

To stabilise the weak rupee, the Reserve Bank yesterday imposed restrictions of USD 100 million on "position limit" for forward contracts by banks. The rupee closed at record low of 55.04 on Monday. "The position limit for the trading member…bank in the exchanges for trading Currency Futures and Options shall be USD 100 million or 15 per cent of the outstanding open interest, whichever is lower," RBI said in a notification. It also advised the banks dealing in foreign currency to bring down their trading limits by June-end.

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