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  1. #1
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    Dec 2009


    Default Rupee back to 55-level with RBI help

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    After plunging to a new low of 56.38, the rupee on Thursday staged a smart recovery to close at 55.64 against the dollar to snap the three-day string of losses as RBI intervention saw increased dollar selling by banks amid investors regaining appetite for Indian stocks.

    At the Interbank Foreign Exchange (Forex) market, the domestic unit opened lower at 56.14 a dollar from its previous close of 56 and soon logged an al-time low of 56.38 on sustained dollar demand from oil importers.

    Soon RBI stepped in helping rupee bounced back and settling for the day at 55.65, a rise of 35 paise or 0.62 per cent.

    This marks a turnaround after rupee’s 158-paise plunge in the last three sessions weighed down by the deterioration in the Balance of Payments (BoP), mainly trade gap amid muted capital inflows in view of the volatile Eurozone situation.

    Forex dealers said the rally in stock markets after yesterday’s petrol price hike generated hopes that further economic reforms will get a boost and foreign funds will start returning to India.

    “Rupee recovered today due to some selling of dollars by public sector banks with addition of liquidity from the EEFC accounts. Also, hike in petrol price has lifted the sentiment, pushing up the equity market, which in turn has positive impact on the domestic currency,” said N S Venkatesh, Head of Treasury, IDBI Bank.
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