press trust of india
MUMBAI, 21 JUNE: The rupee today staged a smart recovery to end 30 paise higher at 59.27 on the back of hefty corporate inflows and dollar selling by banks at the behest of Reserve Bank of India (RBI), amid finance minister, Mr P Chidambaram’s assurance that there was no need for panic over the recent currency slide.
However, heavy outflow by foreign funds from equities of about Rs 3,850 crore in two sessions and firm dollar overseas restricted the rupee rise, forex dealers said.
Yesterday, rupee touched an all-time low of nearly 60-level intra day after US Fed’s stimulus exit strategy spooked global markets.
“Some amount of corporate inflows was seen today,” said Mr Ashutosh Raina, head of Forex Trading, HDFC Bank.
Traders said public sector banks sold dollars at the direction of RBI to arrest the currency slide. Rupee has lost over 10 per cent since 30 April.
“There was intervention by RBI in market, which helped the sentiment. Trading of European market, US Dow trends and domestic market performance also supported the currency,” said Mr Hemal Doshi, Chief Currency Strategist, Geojit Comtrade.
The rupee commenced lower at 59.74 a dollar from previous close of 59.57 at the Interbank Foreign Exchange market and declined further to a low of 59.80. Later, it pulled back and jumped to a high of 59.13 before concluding at 59.27, showing a rise of 30 paise or 0.50 per cent.
The dollar index, consisting of six major global rivals, was up by 0.21 per cent today, limiting gains in rupee.
“A pullback was always on the cards for rupee after what we saw last few days,” said Mr Mohan Shenoi, president of Group Treasury & Global Markets at Kotak Mahindra Bank.
At New Delhi, Mr Chidambaram emphasised that the government was “watching the situation” and RBI will take “whatever action it has to take”.
The Indian benchmark S&P BSE Sensex today recovered its initial losses and closed up by almost 55 points, after tanking over 526 points yesterday as Fed’s decision of slowing down bonds purchase from this year scared markets.