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Rupee plummets against dollar, RBI manages partial rescue

The Indian currency, after touching an intra-day low of Rs 36.76 against the US dollar, settled higher due to the Reserve Bank of India's hectic intervention, but still closed lower by another 4 to 5 paise over yesterday's closing level of Rs 36.64-65 against the greenback in volatile trading at the interbank foreign exchange market on today.

The rupee, with an initial weakness of Rs 36.66-67 per dollar, continued to depreciate due to heavy corporate dollar demand and the active dollar bidding by the State Bank of India, which has been purchasing dollars for the past week, a dealer said. The rupee saw the the day's lowest of Rs 36.76 levels during the day.

The RBI intervened strongly at Rs 36.70 and Rs 36.75 levels and sold round about 116 to 200 million dollars for the day. The RBI has said to have sold about 500 million dollars in the two day's trading, market sources said.

According to a leading forex dealer from one of the nationalised banks, the statement made by Union Commerce Minister B B Ramaiah today saying that the government would not intervene in the forex market gave speculators an indication.

Meanwhile, the forward premiums witnessed a sharp fall of over 20 paise over yesterday's closing levels despite the central bank's intervention, the dealer said. The cash to spot dollar opened at 2 to 3 paise premium and the business was done at 1.75 to 2 paise premium.

The monthly premium ended at November 6-9, December 30-33, January 53-56, February 74-77, March 96-99, April 117-120 and May 137-142 paise premiums respectively.

On the other hand, the overseas market witnessed choppy conditions with the US currency initially witnessing selling pressure and then was reported higher for the later part of the day, a dealer said.

Elsewhere, the Reserve Bank of India fixed the reference rate at Rs 36.71 per dollar as against yesterday's fix of Rs 36.62, a rise of 9 paise.

UNI