Rupee edges up to 63.50 per dollar on RBI intervention

Mumbai: Dollar sales by the Reserve Bank of India (RBI) helped the rupee close slightly higher on Friday after it had dropped past the 64-per-dollar-mark in the morning trade.

add_main_imageThe local currency closed at 63.4950 per dollar, up 0.06% from its previous close of 63.5350.

In morning trade, the rupee came under pressure on dollar demand from importers. The currency fell to 64.1750 per dollar at one point but recovered after the central bank started selling dollars. The RBI was seen selling dollars even in the closing minutes of trade, currency dealers said.NextMAds

According to foreign exchange dealers, the intervention signalled the central bank’s intent for the currency to strengthen from present levels. Besides, exporters are also selling their dollar holdings, expecting rupee to strengthen further.

“The next technical level for rupee is 62.50 a dollar,” said a senior currency dealer with a foreign bank who did not wish to be named.

Since January this year, the rupee has weakened 13.39%, and is the worst performing Asian currency.

The dollar index, which measures the US currency’s strength against major currencies, was trading at 81.620, up from the previous close of 81.489.

India’s benchmark Sensex ended at 19,732.76, down 0.25%, or 49.12 points, from the previous close.

The yield on the 10-year bond ended at 8.499% against its previous close of 8.501%.sixthMAds

The overnight call money rate closed sharply lower at 4% after opening at 10.385%. In intra-day trade, the call money rates had dropped to 3%, Bloomberg data showed.

“This is because of the tax money coming back in the system. Call rates will again become normal next week when the advance tax outflow begins,” said N.S. Venkatesh, head of treasury at IDBI Bank Ltd.