Mumbai: The rupee on Sunday fell sharply by 55 paise to close at fresh two-year low of 47.81/82 against the US currency as investors rushed for the dollar as a safe haven
investment amid global worries.
    
Renewed dollar demand from importers and some banks and weakness in equities also weighed on the rupee, dealers said.
    
Failure in announcing a rescue for debt-ridden Greek by European Finance Ministers in a meeting last Friday hit the high risk assets like euro and equities, as traders went for
dollar as a safe haven investment, leading to a smart rise in dollar overseas, traders said.
   
Dollar index was up by about 0.7 per cent against its six major rivals in Europe.
    
At the Interbank Foreign Exchange (Forex) market the domestic unit opened bearish at 47.55/56 a dollar from last close of 47.26/27.
   
It gradually declined further to a low of 47.8350 before ending at 47.81/82, level not seen since September 29, 2009 when it had closed at 48.10/11.

"Indian equity markets traded weak throughout the day and ended down by over 1 per cent which depreciated the rupee. Fall in Euro and Dollar demand from oil importers also helped
dollar to gain against rupee," Alpari Financial Services (India) CEO Pramit Brahmbhatt said.
    
"High risk is still evident in the global economy with a general feeling that the European politicians won’t be able to solve the debt problem fundamentally. The cancellation of a
visit by Greek Prime Minister to US also added to it," Abhishek Goenka, CEO, India Forex Advisors said.

"The fall in the rupee is expected to continue and we can target 48.20 levels in near term," he added. Fresh dollar demand from banks and importers, in view of dollar firmness in overseas markets, mainly affected the rupee value against the American currency, a dealer said.

Meanwhile, New York crude oil was trading above USD 87 a barrel in London.

The BSE benchmark Sensex today snapped its three sessions of gains and fell by 188.48 points or 1.11 per cent. Other Asian peers too finished with marked losses.
    
The RBI fixed the reference rate for the dollar at Rs 47.7920 and the euro at Rs 65.3544.
    
The rupee premium for the forward dollar dropped on fresh receivings by exporter. The benchmark six-month forward dollar premium payable in February dipped to 64-67 paise from last weekend's close of 79-1/2-81-1/2 paise and far-forward contracts maturing in August tumbled to 100-104 paise from 125-127 paise previously.
    
The rupee reacted downwards against the pound sterling to end at Rs 75.13/15 from last Friday's close of Rs 74.64/66 and also moved downwards to Rs 65.33/35 per euro from Rs 75.21/23 previously. It also fell back against the Japanese yen to Rs 62.35/37 per 100 yen from last close of Rs 61.64/66.

(Agencies)