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RBI intervenes to halt rupee rise

The Reserve Bank of India on Tuesday intervened in the interbank forex market when the rupee touched the day's high of Rs 36.1975 in a relatively quiet foreign exchange market.

The Indian rupee, which saw a day's high of Rs 36.1975 against the US greenback following excess dollar supply, finally settled down at Rs 36.2/205 on the RBI's late intervention supporting the US dollar.

The currency opened lower at Rs 36.23-24 per dollar but firmed up to a high of Rs 36.19-20 levels on excess dollar supply and absolute nil corporate demand and hovered in the same range till 14.30 hours IST, dealers said.

Meanwhile, late in the afternoon, the RBI entered the market to arrest the rupee appreciation which made the US dollar recover from falling below the Rs 36.20 level, a leading forex dealer said.

On the other hand , the forward premiums initially came down by 10 paise over Monday's closing levels and this downfall is attributed to the announcement of the credit policy which mentioned a cut in the interest rate by one percentage points, the dealer said.

They added that later the premiums recovered due to some paying pressure and settled down slightly higher than the opening levels.

The RBI's credit policy failed to create any ripples as the policy features were well-known through media reports and as nothing was beyond expectations, a forex dealer commented.

The overseas market also witnessed quiet trading with the US dollar and pound sterling reported well bid against various other European currencies maintaining a bullish phase.

Elsewhere, the Reserve Bank fixed the reference rate at Rs 36.22 per dollar over Monday's fix of Rs 36.21.

UNI