COMMENTARY
INTERVIEW
SPECIALS
CHAT
ARCHIVES

Despite RBI, rupee plunges by 6 paise

Despite the Reserve Bank of India's continued intervention in the violate foreign exchange market, the Indian currency drifted by another five paise against the greenback following active dollar buying from the State Bank of India and corporates on Tuesday.

The rupee opened slightly higher at Rs 36.59-60 and then kept on weakening following good corporate demand. The RBI is reported to have entered the market at the Rs 36.63 and 36.65 levels. But the State Bank of India's active dollar bidding forced the rupee to depreciate still further and the rupee finally settled down at a low of Rs 36.64-65 per dollar.

According to leading forex dealers, the rupee depreciation was to be expected since the RBI has intervening in a consistent manner nor has it set any specific mark to hold the rupee at. The now-on, now-off intervention may be to prevent too steep a fall in the rupee, the marketmen added. A rumour floating around in the market said the rupee was to be devalued by about 5 per cent. However, there was no official confirmation on the same.

Meanwhile, the forward premiums moved higher by about 2 and 3 paise from Monday's level. There was no cash to spot today as the New York market was closed.

The monthly premiums were quoted at November 11-14, December 35-37, January 60-63, February 80-84, March 103-106, April 125-128, May 150-152, June 150-152, and July 121-174 paise premium respectively. The one-year premium was quoted at 253-263 paise.

On the other hand, the overseas market witnessed yet another dull day, with little happening, a dealer said, and added that the currencies moved within a very narrow range of 30 to 40 points.

Meanwhile, the Reserve Bank of India fixed the reference rate at Rs 36.62 per dollar as against yesterday's fix of Rs 36.56.

UNI