Back Rupee recovers losses; ends lower Our Bureau
Mumbai, May 22
The rupee crossed the psychological 43 level during the day as the price of global crude boiled to a high of $135 per barrel. The currency, however, partially recovered its losses at close. The domestic currency opened at 43.07 and plummeted to 43.20. It, however, recovered to end the day at 42.95/96, against the previous close at 42.80/82.
Forex dealers said that there was all round demand for dollars from importers as well as banks. However, nationalised banks sold dollars on behalf of the RBI which helped the rupee trim its losses. Mr R.V.S. Sridhar, Senior Vice President- Treasury, Axis Bank, said that the short-term mismatch between demand and supply of dollars, the soaring price of crude and the fall in the domestic stock market caused the rupee to depreciate on Thursday. “FII and ECB inflows are reduced and the trade balance continues to be adverse, The pressure on the rupee will remain in the short-term,” Mr Sridhar said. Forex dealers said that for the next few weeks the rupee is likely to be in the range of 42.50-43.50. Market participants said that RBI’s intervention would also aid liquidity management since there has been over Rs 20,000 crore of surplus cash in the system. As importers booked contracts, the forward premia inched up with the 6 month closed at 1.84 per cent (1.71) and the 12 month ended at 1.41 per cent (1.3).Rupee pauses at support
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