Rupee falls to 13-month low against dollar

The spot rupee reached a fresh 13-month low of 42.90 against the dollar following heavy purchase of the US currency by oil companies and banks but recovered to close at 42.51. The rupee-dollar exchange rate of 42.91 is the lowest since April 12, 2007. Friday's close meant that this week, the rupee dropped 2.2 per cent against the dollar, after a 2.3 per cent fall last week. In 2008, the rupee has depreciated 7.6 per cent, with only the South Korean Won and Thai Baht seeing a steeper decline among the major Asian currencies.

The Indian currency has been depreciating on fears of further rise in global crude prices. The worry is that the oil price rise will result in a higher import bill and widen the trade deficit further.