Re under pressure, falls below 39 mark

MUMBAI, February 23: The rupee once again came under pressure and fell below the 39 level against the dollar at the inter-bank foreign exchange market here on Monday. Even though the Reserve Bank of India intervened in the spot dollar market to stop the rupee slide after it breached the 39 mark, the Indian currency weakened to 39.22/26 on a day when there was heavy buying by the State Bank of India. Dealers said the central bank pumped in 25-30 million to prop up the rupee.

8220;SBI bought dollars in large amounts which saw other banks also buying dollars to sell it,8221; P Mukherjee, deputy general manager at UTI Bank said. According to dealers, corporates are covering their exposures which is leading to the weakening of the rupee. 8220;IOC could be one of the major buyers to meet its month-end requirements,8221; a dealer in a foreign bank said.The rupee touched a low of 39.20/22 before the apex bank intervened to sell dollars. Thereafter the rupee gained some ground to trade at 39.12. However, the rupee once againweakened to close at 38.22/26.

8220;I think this is the last time we are seeing the rupee trading at 38 levels. The rupee should settle between 39 and 39.20,8221; P H Ravikumar, senior vice president treasury of ICICI Bank said. 8220;The rupee should strengthen after month end pressures ease,8221; said another dealer.

In the forward market, the SBI in an unusual move received dollars. 8220;They did it on behalf of the Reserve Bank as the forward premium on dollar was rising. After their paying in the market, premia came down especially in the far forwards,8221; a treasury head in a foreign bank said.