Rupee opens stronger after RBI intervention
New Delhi, June 12, 2013
The Indian rupee opened stronger on Wednesday tracking gains in most other Asian currencies, but domestic data due later in the day will be key for further direction.
At 9:01 am (0331 GMT), the partially convertible rupee was at 58.15/18 per dollar, compared to its close of 58.39/40.
The rupee on Sunday had slid to a record low against the dollar as dealers moved into the US currency following robust US jobs data and growing concern about the South Asian nation's struggling economy.
Striking 58.98 per dollar at its weakest, the rupee had plunged 3.25 per cent this week, notching record lows for two consecutive days.
RBI intervened in the foreign exchange markets on Tuesday to halt the rupee's slide, the deputy chairman of the country's Planning Commission Montek Singh Ahluwalia told TV channel CNBC-TV18 on Wednesday.
Reuters had reported on Tuesday traders had spotted the central bank selling dollars via state-run banks starting at around 58.95 levels, after the unit fell to a record low of 58.98.
Ahluwalia also said there was a committee looking at simplifying foreign direct investment rules.
Dollar-selling by state banks, believed to be acting at the behest of the central bank, prevented a fall though the 59 per dollar level, though intermittent bouts of dollar selling by exporters had also slowed the fall.
India's government, central bank and the securities markets regulator will take "warranted" action to stall a sharp fall in the rupee, the Finance Ministry's chief economic adviser Raghuram Rajan said yesterday.
He said oil companies had agreed to stagger dollar purchases as much as possible to reduce pressure on the rupee, which would mark an important move, considering these firms are the biggest domestic buyers of the greenback.
The fall in the spot rupee was also exacerbated by the large long dollar positions being built in the offshore non-deliverable forwards market, traders said.-Reuters