RBI steps fail to check rupee as it hits fresh low at 61.80

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RBI steps fail to check rupee as it hits fresh low at 61.80

This article was posted on Aug 6, 2013 and is filed under Market News

The rupee hit a all time low in the early trade today as the liquidity tightening steps taken by Reserve Bank of India (RBI) since July 15 failed to prop up the currency.

The Reserve Bank of India likely sold dollars via state-run banks, helping the rupee recover from a record low, three traders told Reuters.

One trader said the central bank started selling dollars around 61.78 levels, though he said the sales were not strong.

The partially convertible rupee was trading at around 61.58/59 per dollar at around 1:10 pm, after hitting a record low of 61.80 a little while earlier.

Yesterday, rupee closed at 60.88 per dollar.

The currency may further weaken in the absence of any concrete action by the government to attract inflows by way of sovereign or NRI bonds.

“I see it falling further due to dollar demand and panic in the market. The next low this week can go up to 62.65,” said a currency dealer with a state-run bank.

The liquidity tightening measures have failed to yield desired results as short term rates eased with liquidity in the banking staying largely comfortable on the back of large government spending.

For more visit: Business Standard

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