Thursday, May 11 2006 12:40 Hrs (IST) - World Time -

Mumbai: The rupee today (May 11, 2006) declined sharply against the US currency on renewed dollar demand from oil corporates following a surge in crude prices in nervous early trade at the Interbank Foreign Exchange (forex) market.

Opening distinctly weak at Rs 44.9850/45.0050 per dollar, the Rupee later slipped to Rs 45.02/03 per dollar, sharply lower from yesterday's close of Rs 44.9325/9400 per dollar. A rise in crude oil prices to over 72 dollars a barrel fuelled renewed heavy dollar demand from oil corporates and importers and exerted severe pressure on the Rupee, despite strong FII inflows and a retreating dollar overseas, a forex dealer said.

Suspected central bank dollar buying intervention also weighed on the currency, he added.

World crude oil prices shot-up to US$ 72.42 a barrel in early Asian trade today due to supply concerns over tension on Iran's nuclear programme amidst rising consumption. Foreign Institutional Investors (FIIs) infused a whopping US$ 102.4 million into equity markets on May 9, taking the total inflows in the current month so far to a massive US$ 772 million.

The dollar is currently hovering around multi-month low against major global rivals mainly the Euro, despite a brief overnight rally.

Meanwhile, the US Federal Reserve increased interestrates by a quarter-percentage points to five per cent.

In cross currency trades, the Euro was quoted at Rs57.34/36, Pound Sterling at Rs 83.53/56 and the Japanese Yen (100) Rs 40.43/46.