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Rupee hovers near psychological barrier of 43.70, closes at 43.65 to $

The rupee fell to 43.6675 to a dollar today, touching the lowest level in almost two years, with traders dragging it down following heavy dollar-buying by the State Bank of India, or SBI.

However, later the SBI sold the dollar bringing up the rupee to 43.65/655. The rupee finally ended the day at its previous level of 43.65.

Foreign exchange dealers have been cautiously watching the rupee's slide as it is now quite close to its lowest-ever level of 43.70 that it touched in August 1998.

SBI's dollar sales earlier this week were at the central bank's direction and this helped stem the slide of the rupee. The forex market had panicked with the crashing of the US markets and operators feared that there would be big outflow of dollars.

The SBI then bought dollars adding to the chaos, as other banks too followed suit trying to cover short dollar positions.

Wary operators had not expected the SBI to buy dollars today too and when it did the rupee slipped to its 2-year low.

However, after the reported intervention of the Reserve Bank of India, or RBI, the SBI sold the greenback stabilising the rupee.

Analysts say that rupee has depreciated by well over 2.5 per cent during the fiscal 1999-2000, and expect it to fall further.

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