Rupee bounces by 47 paise to 60.14 as RBI, SEBI step in
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Rupee bounces by 47 paise to 60.14 as RBI, SEBI step in

Last Updated: Tuesday, July 09, 2013, 20:37
 
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Rupee bounces by 47 paise to 60.14 as RBI, SEBI step in
Mumbai: Massive intervention by RBI and SEBI Tuesday helped rupee shed two days of losses to close at 60.14 against the US dollar with steps to rein in speculative trade and direction to oil companies to buy dollars from a single state-owned bank.

With rupee hitting a life-time low of 61.21 yesterday, the Reserve Bank and capital market regulator SEBI announced measures to curb volatility and speculation in the currency derivative market.

RBI also asked Indian Oil, Bharat Petroleum, Hindustan Petroleum and Mangalore Refinery to source all of their 8-8.5 billion of dollar requirement every month for import of oil, from a single public sector bank.

As per current practice of discovering better rates, oil firms seek quotes from several banks for their dollar needs, which adds to the speculation demand for the Green Buck.

A falling rupee, which has depreciated by over 12 percent since April-end, not only meant the imports of oil and other commodities became costlier but also translated into worsening of current-account situation and straining financing of fiscal deficit.

SEBI late yesterday evening cut the exposure that brokers and their clients can take on currency derivatives and also doubled their margins on dollar-rupee contracts.

Simultaneously, RBI barred banks from trading in currency futures and exchange-traded currency options market on their own. They will however continue to trade on behalf of clients.

Also, non-banking finance companies involved in asset financing were allowed to tap external commercial borrowings (ECBs) under the automatic route to attract dollar inflow.

Prime Minister Manmohan Singh, who is believed to have discussed the sharp depreciation in rupee with Finance Minister P Chidambaram and Planning Commission Deputy Chairman Montek Singh Ahluwalia during the past two days, today set in motion measures to boost manufacturing and exports.

While steel production capacity is being raised, textile exports are targeted to soar by 30 percent.

Chidambaram arrived in Washington today to sell India growth story to American investors.

PTI


First Published: Tuesday, July 09, 2013, 18:42


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