Rupee may fall below 43 level

8220;If the political uncertainty continues, the rupee is likely to show further weakness,8221; said another dealer. The rupee ended at 42.72/73 as against 42.79/81 of the previous day, gaining about 8 paise. The rupee which had fallen sharply by about 25 paise on April six following the AIADMK8217;s decision to withdraw their support to the government, continued its slide due to political uncertainty and possiblecollapse of the government, depreciating about 36 paise till Thursday.

8220;The rupee may not go into a free fall. The weakness will largely be an intra-day affair, and there could be a smart recovery by close. The Reserve Bank, in particular may not like to have a volatile situation,8221; said a banker.

One factor which will help the RBI to intervene in the forex market is the comfortable forex reserves level. The country has witnessed a rise in forex level to over 32 billion recently. However, experts have cautioned the RBI in using the forex reserves as FIIs are expected to pull out from the Indian market in the coming days. FIIs were already net sellers during the financial year 1998-99.