Thursday 22 September 2011
RBI believed to have sold dollars around 49.00
The Reserve Bank of India was suspected to be selling dollars in the forex market on Thursday at around 49.15 rupees to arrest steep losses in the local unit after global risk aversion prompted investors to move into safer assets like debt.
The central bank was likely to have started selling dollars from 49.15 per dollar, helping drive the partially convertible rupee back below the 49 mark, 11 dealers said.
The rupee fell more than 1.9 percent on Thursday to its lowest in more than 26 months as global investors fled risky assets following a grim economic outlook for the United States.
The partially convertible rupee was at 49.25/26 per dollar, after hitting 49.2650, its weakest since July 13, 2009.
The dollar climbed to a seven-month high against major currencies after the Federal Reserve flagged "significant downside risks" to the US economy, but stopped short of bold monetary easing.
India's main share index fell more than 4 percent on the day.
The fall in the rupee will fuel India's inflationary woes, making imported goods such as foreign crude oil, on which the country is reliant, more costly.
India's annual inflation is currently sitting near double digits. "Global concerns and a weak rupee are reducing risk-appetite," said Hemen Kapadia, chief executive with investment advisory firm Chart Pundit.
The Reserve Bank of India raised rates for the 12th time in 18 months last week to combat inflation, despite signs of slowing growth.
The central bank was likely to have started selling dollars from 49.15 per dollar, helping drive the partially convertible rupee back below the 49 mark, 11 dealers said.
The rupee fell more than 1.9 percent on Thursday to its lowest in more than 26 months as global investors fled risky assets following a grim economic outlook for the United States.
The partially convertible rupee was at 49.25/26 per dollar, after hitting 49.2650, its weakest since July 13, 2009.
The dollar climbed to a seven-month high against major currencies after the Federal Reserve flagged "significant downside risks" to the US economy, but stopped short of bold monetary easing.
India's main share index fell more than 4 percent on the day.
The fall in the rupee will fuel India's inflationary woes, making imported goods such as foreign crude oil, on which the country is reliant, more costly.
India's annual inflation is currently sitting near double digits. "Global concerns and a weak rupee are reducing risk-appetite," said Hemen Kapadia, chief executive with investment advisory firm Chart Pundit.
The Reserve Bank of India raised rates for the 12th time in 18 months last week to combat inflation, despite signs of slowing growth.
