Rupee
reacts downward at close after firm start
New Delhi,
Feb.19, 2007
Ashok Malhotra
NRI press
The rupee has reacted downwards after firm start and
ended at Rs 44.13/14 against the US currency on some
dollar buying by importers and suspected intervention
by the central bank, despite weak dollar overseas
and firm equity markets.
In active trade at the Interbank Foreign Exchange
(FOREX) market, the Indian unit opened better at Rs
44.07/08 a dollar from last Thursday's close of Rs
44.0950/1050 per dollar and rallied further to a high
of Rs 44.06 a dollar.
A smart rise in forex reserve by over USD five billion
for the week ended 9th February on strong Foreign
Institutional Investors (FIIs) inflows into equity
as well as debt markets helped the rupee to appreciate
at initial stages.
However, suspected intervention of central bank at
rupee's higher levels and dollar buying by some banks
on behalf of their clients wighed down the rupee and
it touched a low of Rs 44.16 per dollar before concluding
the day lower at Rs 44.13/14 a dollar.
The Reserve Bank of India (RBI) did not want the
rupee to appreciate sharply against the dollar to
support the exporters, a forex dealer said.
Meanwhile, the euro and sterling had strengthened
against the dollar on last Friday due to weak US economic
data.
