After slumping to 60.90 levels in early trade, Indian rupee Thursday managed to recoup most losses to end almost flat at 60.43 against the US dollar on suspected RBI intervention and stricter hedging rules for FIIs.
The dollar strengthened overseas after the US Federal Reserve gave no indication of withdrawing its bond-buying plan and US GDP growth figures were better than expected.
The rupee opened lower at 60.70 a dollar from the previous close of 60.40 at the Interbank Foreign Exchange Market. It moved in a range of 60.25 to 60.90, before PSU banks selling dollars at the behest of Reserve Bank of India (RBI) helped the local currency end at 60.43, down 3 paise.
"Towards the end, rupee futures appreciated over 0.75 per cent as RBI intervention was suspected in the foreign exchange markets to defend the rupee," said Pramit Brahmbhatt, CEO of Alpari Financial Services (India).
In yet another step to rescue the rupee, which fell to a near-record low of 61.20 on Wednesday, the Reserve Bank Thursday tightened hedging rules by making it mandatory for foreign institutional investors to obtain the consent of holders of participatory notes and derivative instruments before hedging.
The benchmark S&P BSE Sensex erased initial gains and closed down about 29 points. Foreign institutional investors pumped in Rs 1.42 billion Wednesday, as per provisional data with the stock exchanges.
In Chennai, RBI Governor D Subbarao reiterated there was no time frame for rolling back liquidity tightening measures imposed to address exchange rate volatility.
"The measures taken will be in place until volatility in the foreign exchange market is controlled. I do not want to give any time frame," Subbarao said. .
Published on: Aug 01, 2013, 10:33 AM IST
Posted by: Navneeta N, Aug 01, 2013, 10:33 AM IST