Mumbai: The rupee turned weak after a sharp appreciation of 38 paise in the last two days and ended on 13 June at 40.9750/9850 against the US currency on good import coverings amid sustained capital inflows into Indian equity markets.
The local currency touched a low of 41.08 a dollar but inflows from FII for DLF Ltd’s public issue trimmed the losses.
In fairly active trade at the Interbank Foreign Exchange (forex) market, the Indian unit moved in a wide range of 40.83 and 41.08 after resuming firm at 40.85/87 a dollar against the previous close of 40.7450/7550.
The rupee came under pressure despite comfortable supply position after importers resorted to dollar buying, forex dealers said.
The central bank seemed to be absorbing the portfolio inflows through the IPO route in a bid to prevent the rupee from surging past 40.50 level, they added.
The Reserve Bank of India (RBI) bought over USD 2 billion during April 2007 through intervention in the forex market as per the data.
Traders, however, opined that the RBI is suspected to be intervening in the market since May to arrest the rupee rise.
Meanwhile, the Commerce Ministry has come out in support of exporters asking Finance Ministry to notify service tax exemptions for them and increase duty drawback as well as DEPB rates to help traders tide over the crisis, caused by the rise in rupee.
Meanwhile, the RBI fixed the reference rate for the US currency at Rs40.93 per dollar and for the single European unit at Rs54.46 per Euro.
In cross currency trades, the rupee also depreciated against the British Sterling, the Euro and the Japanese Yen.
The Indian unit dropped further against the sterling to Rs80.68/70 per pound from overnight close of Rs80.36/38 per pound and turned lower against the single European currency to Rs54.41/43 per Euro from last close of Rs54.36/38 per Euro.
The rupee also weakened against the Japanese unit and closed at Rs33.50/52 per 100 yen from previous close of Rs33.45/47 per 100 yen.