Mumbai: In sync with local equity markets, the Indian rupee fell sharply by 38 paise to $48.46/47 against the greenback in early trade on heavy dollar demand from foreign banks.
Foreign exchange dealers said foreign banks, this morning, heavily bought dollars in non-delivery forwards (NDF) blocking the rupee’s surge in the last two days.
The domestic currency had hit the Rs47.00-level against dollar yesterday after government and the central bank took measures to infuse liquidity in the banking system.
The Indian unit resumed weak at Rs48.38/40 a dollar from its previous close of Rs48.09/10 and later moved down to Rs48.46/47 in late morning deals as equity markets again turned weak after a two-day rally.
Yesterday, the RBI had conducted a special fixed rate 14- day repo at nine per cent per annum against eligible securities for a notified amount of Rs20,000 crore to enabling banks to meet the liquidity requirements of mutual funds. However, banks utilised Rs3,500 crore of this facility.