Rupee snaps 5-days of losses, up 41 paise to 63.30 vs dollar
Mumbai: The rupee gained against the dollar for the first time in six days and added 41 paise to close at 63.30 Wednesday on fresh sales of the US currency by exporters and by state-run banks on behalf of the RBI.
Capital inflows supported the rupee after initial weakness as the dollar strengthened overseas and stocks fell.
The Reserve Bank of India, seeking to calm the currency markets, today said the current account deficit in 2013-14 will be USD 56 billion, lower than earlier projections, and that there is no fundamental reason for rupee depreciation.
At the interbank foreign exchange market, the rupee opened lower at 63.90 and dropped to 63.91 as stocks declined and importers bought dollars.
It bounced back on fresh dollar sales by exporters and some banks to a high of 63.28 before settling at 63.30, a rise of 41 paise or 0.64 percent. In the previous five sessions, the rupee had slumped 209 paise or 3.39 percent.
RBI Governor Raghuram Rajan said the central bank was weighing options to contain exchange rate volatility and would come out with 'appropriate' steps in the future.
"Overall, his speech came as a breather for the weakening rupee," said Abhishek Goenka, CEO of India Forex Advisors. "He also added that they will bring down the current account deficit to USD 56 billion this fiscal."
The benchmark 30-share Sensex continued its slide and closed lower by 87.51 points or 0.43 percent. Overseas investors bought a net Rs 347.58 crore of shares yesterday, according to provisional stock exchange data.
"The rupee appreciated over half a percent as the Reserve Bank of India is likely to have intervened via state-run banks as rupee was falling further after it opened at a nine-week low of 63.90 against the dollar," said Pramit Brahmbhatt, CEO of Alpari Financial Services (India). "Equity markets continued its fall...Which capped the rupee's gains."
The dollar index was up 0.04 percent against a basket of six major global currencies.
Forward dollar premiums fell on fresh receipts by exporters.
The benchmark six-month forward dollar premium payable in April ended lower at 245-1/2-247-1/2 paise from 255-257 paise previously and far-forward contracts maturing in October dropped to 482-484 paise from 495-1/2-497-1/2 paise.
The RBI fixed the reference rate for the dollar at 63.6545 and for the euro at 85.5502.
The rupee recovered to 100.93 against the pound from 101.20 previously and to 63.62 per 100 Japanese yen from 63.90. It bounced back to 84.92 per euro from 85.32.
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