Rupee recovers; RBI promises steps

The rupee on Friday bounced back from its record low hit in the previous session to close 30 paise higher

Written by ENS Economic Bureau | Mumbai | Published: June 22, 2013 3:05:41 am

The rupee on Friday bounced back from its record low hit in the previous session to close 30 paise higher at 59.27 helped by capital

inflows,intervention by the Reserve Bank of India and finance minister P Chidambaram’s assurance that there was no need for panic over the recent currency slide.

The rupee’s gains on Friday were largely attributed to inflows related to Essar Steel’s $1 billion overseas borrowing,dealers said. The currency was also helped by some unwinding of non-deliverable forward trades. Traders said public sector banks sold dollars at the behest of the RBI to strengthen the rupee. The rupee which hit 59.98 intra-day after US Fed’s monetary stimulus exit plan roiled markets on Thursday has lost nearly 10 per cent since April 30 and 3 per cent this week.

The Sensex also recovered to 18,820.81 before finishing at 18,774.24,showing a net gain of 54.95 points or 0.29 per cent. RBI Deputy Governor HR Khan said the Reserve Bank will take every step required to stem the plunge of the domestic currency.

“We are watching and monitoring the situation. All steps that need to be taken will be taken,” Khan told reporters on the sidelines of an event organised by the National Payments Corporation (NPCI) here.

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