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.