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Rupee strengthens vs dollar- Rs 43.04/05 a dollar

 

New Delhi, March 28, 2007
Ashok Malhotra

Dollar closed at Rs. 43.04/05 and ends at more than 7-year high. According to specialist in money exchange, the dull demand for the greenback helped the rupee to gain against the American currency. Now NRIs will get less Rupees when they invest in India.

RBI which is expected to check the rupee's sustained surge against dollar, also aided the rupee sentiment for the third consecutive day. RBI is indirectly controlling inflation by simultaneously managing liquidity. This change will hurt exporters, but help economy to go up. A steep fall in world crude oil prices forced State-run banks to sell dollar purchased at higher levels on behalf of oil PSUs.


Inflation is now ruling at 6.46%, way above the projected levels of 5.0-5.5% for the year. RBI has decided to cap the daily injection of liquidity through repo operations under the LAF to Rs 3,000 crore since the beginning of March. By letting the rupee appreciate, the central bank has also indirectly sought to address supply-side problems.

 

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