Continuing its steady fall,the rupee approached fast the 54-level against the dollar intra-day but recouped on suspected RBI intervention before ending the day at four-and-a-half month low of 53.41/42,a hefty loss of 45 paise.
At the interbank foreign exchange market,the domestic currency had plunged to an intra-day low of 53.47 on sustained dollar demand from importers amid weak equities.
Dealers said the rupee remained bearish due to a slew of reasons and could have declined to sub-54 levels but for Reserve Bank’s intervention. RBI is believed to have asked banks to improve dollar supply. They added that the rupee would touch 54 level in near term.
However,RBI’s intervention in the forex market could not be verified independently.
At the fag end rupee managed to pull back from the day’s lows but still ended at 53.41/42,a steep fall of 45 paise.
Previously,the rupee had closed at 53.64/65 on December 15,2011. In straight three trading sessions of fall,the rupee has depreciated by 87 paise,or 1.66 per cent.
“Due to the continuing structural issues like higher current account deficit,high trade deficit along with concerns relating to GAAR (General Anti Avoidance Rule) provisions,rupee has shown weakness in the recent time,” N S Venkatesh,the Head of Treasury,IDBI Bank,said.
In the near-term,this weakness is likely to continue till capital inflows come back to Indian market,he added.
Indian Overseas Bank General Manager (Treasury) T S Srinivasan said,”Today’s rupee movement showed inherent weakness in the currency. I expect rupee to touch Rs 54 per dollar in the near-term as weakness in the domestic currency continues due to structural issues faced by the country.”
“I expect some sort of cosmetic intervention by RBI tomorrow otherwise sentiment will go for a toss.” Continued dollar firmness overseas too weighed on the rupee while fresh capital inflows in last two sessions could not able to stem the rupee fall,a dealer said.
The dollar index,a gauge of six major rivals,was up by nearly 0.1 per cent ahead of an interest-rate meeting at the European Central Bank (ECB) late today while New York crude oil was trading below USD 105 a barrel in European market.
The BSE benchmark Sensex today plunged by 150.72 points or 0.87 per cent,expecting more capital outflows in near future.
“All eyes are on RBI and the government to rescue the rupee since a further weakening of the domestic unit would only deteriorate the Indian economic scenario,” India Forex Advisors CEO Abhishek Goenka said.
“The INR,which is shy away from its previous low,is expected to encounter some technical buying since the oscillators are in oversold zone,” he added.
The rupee premium for the forward dollar ended sharply lower on fresh receivings by exporters.
The benchmark six-month forward dollar premium payable in October dropped to 173-175 paise from 182-1/2-184-1/2 paise and maturing in April fell further to 309-311 paise from 324- 326 paise previously.
The RBI fixed the reference rate for the US dollar at 53.2395 and for euro at 69.9815.
The rupee reacted downwards sharply to 86.40/42 against the pound sterling from overnight close of 85.67/69 and also dipped against the euro to Rs 70.12/14 from Rs 69.60/62. It too tumbled further against the Japanese yen to 66.51/53 per 100 yen from last close of 65.95/97.