Rupee ends at 44.49 against dollar

Dealers said the rupee had weakened to levels around 44.52, but the State Bank of India’s (SBI) — which surrogates for Reserve Bank of India — dollar sales above the 44.50 level helped it erase part of the losses. It had opened little changed from Friday’s close at 44.37/38 to a dollar.

A drastic slow-down in Foreign Institutional Investment (FII’s) inflows, genuine pent-up dollar demand from corporates and importers and a fair amount of speculative play were the main reasons behind the steep fall of the rupee to record lows, dealers said.

“The rupee’s drop today was gentle and orderly, devoid of excessive speculation. There is genuine demand for dollars that is pressurising the rupee with the RBI a mute spectator, allowing the rupee to find its own levels vis-a-vis the US currency,” say dealers.

The RBI stepped in last Thursday with its verbal support and released a slew of measures to halt the slide of the rupee after it plunged to historic-lows of Rs 44.74/77.

“Foreign banks were buying dollars for their FII clients to repatriate dollars. Forex inflows have virtually dried up and short-covering by importers further weakened the rupee,” another dealer commented.