The rupee depreciated sharply on Thursday to 41.36 a dollar from Tuesday?s close of 40.63 after global concerns over US subprime defaults. ?There were possibilities that the demand for dollars could also be from a few institutional funds,? said a dealer at a private bank. Banks also took dollar positions in anticipation that hedge funds could withdraw, dealers said.
The rupee opened at 41.10 to the dollar and hovered between 41.06 and 41.10 before ending the day at 41.36. Most deals were transacted at Rs 41.10-41.12 to the dollar.
There was a rush for dollars from importers, too, who had stayed away from the market so far in the hope that the currency would appreciate to Rs 38-per-doller levels, said a dealer at a foreign-owned bank. Exporters took advantage of the slide and selling by them prevented further depreciation of the domestic currency. The six-month dollar premium softened to 1.75 % over the spot rate from the previous trading day?s (Tuesday?s) close of 1.96%.