BackRupee falls 0.47% amid dollar sales by state-owned banks
Rupee opened at 66.1050 and touched a low of 66.2988 in the intra-day trade
Premium(Priyanka Parashar/Mint )
Mumbai: The rupee recouped some of its losses on dollar sales by state-owned banks, likely on behalf of the Reserve Bank of India (RBI), in late trading.
However, the Indian currency ended weaker than its Friday’s close against the dollar after opening lower as dealers covered their dollar positions in early trade.
Rupee ended at 66.02 per dollar, down 0.47% from the previous close of 65.7050. It opened at 66.1050 and touched a low of 66.2988.
“Trade was thin because the US markets are shut today for Labour Day. Finally, the RBI came in and ensured that the rupee ended closer to 66 per dollar," said a dealer with a private bank.
Rupee was also supported by a special window for oil retailers to buy dollars last week opened by RBI last week.
“The volatility in the exchange rate has come down and it looks like RBI’s move to take oil companies’ dollar demand out of the market has worked," said a dealer with a French bank. He declined to be named.
Since January this year, the rupee has weakened 16.69% and has lost the most among Asian currencies during that period.
The dollar index, which measures the US currency’s strength against major currencies, was trading at 82.128, up 0.05% from the previous close of 82.087.
India’s benchmark Sensex ended at 18,886.13, up 1.43% or 266.41 points from the previous close.
The benchmark 10-year bond ended at 8.468%, down 1.64% or 0.142 basis points, from the previous close of 8.609%. It opened at 8.59% and touched a high and a low of 8.592% and 8.387%, respectively.
The call money rate, at which banks borrow from one another in the inter-bank market, ended at 10.25%, unchanged from the previous close of 10.25%. It opened at 10.30% and touched a high and a low of 10.40% and 9.10%, respectively.
Last week, RBI opened a foreign exchange swap window to meet the daily dollar requirements of state-run oil marketing companies (OMCs). Through this window RBI will sell dollars to these companies for a fixed tenure—probably three months—with an understanding that OMCs will return the dollars on expiry of contracts.
“Over the weekend, tensions that US and its allies will attack Syria have also subsided after Britain’s Parliament did not approve the plan and the US president still awaits a Senate approval. All these factors have prevented the rupee’s slide today," the dealer said adding that dollar sales from public sector banks likely on behalf of RBI also helped the rupee.
“The understanding in the market is that oil companies will use the RBI facility and whenever there are huge dollar inflows they will come in to buy dollars to pay back the central bank," said the dealer with the private bank.
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