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Rupee undergoes downward correction against US dollar
Mumbai, Nov 10: Despite healthy trade and portfolio investment inflows, the rupee underwent a downward correction against the US currency today, following a late bout of heavy dollar short-covering by banks and reflecting the dollar`s renewed strength against its major global rivals.
Mumbai, Nov 10: Despite healthy trade and portfolio investment inflows, the rupee underwent a downward correction against the US currency today, following a late bout of heavy dollar short-covering by banks and reflecting the dollar's renewed strength against its major global rivals.
In moderately active but cautious trade at the Interbank Foreign Exchange (Forex) market, the rupee closed at Rs 45.2850/2950 per dollar, a 2-1/2 paise decline from last Friday's close of Rs 45.26/27, which happened to be a one-month high.
It opened at Rs 45.25/26 per dollar and hit the day's peak of Rs 45.2350/2450 in early trade, backed by bunched up weekend dollar supplies.
Heaped up dollar supplies collected over the weekend gave the rupee firm underlying support in early dealings, but dollar mop up by state-run banks and a late round of heavy dollar short-covering by other banks, for their corporate clients, exerted moderate pressure on the rupee, dealers said. State-owned banks were absorbing the excess dollars from the system, possibly on behalf of the central bank to prevent further sharp rupee gains in order to protect exporters' interest, they added.
The rupee at its current levels remains fairly valued on a trade-weighted basis against the dollar. Given the dollar's recent gains against major global currencies, the Reserve Bank of India (RBI) would be averse to any further sharp rupee gains, bankers said.
Bureau Report
It opened at Rs 45.25/26 per dollar and hit the day's peak of Rs 45.2350/2450 in early trade, backed by bunched up weekend dollar supplies.
Heaped up dollar supplies collected over the weekend gave the rupee firm underlying support in early dealings, but dollar mop up by state-run banks and a late round of heavy dollar short-covering by other banks, for their corporate clients, exerted moderate pressure on the rupee, dealers said. State-owned banks were absorbing the excess dollars from the system, possibly on behalf of the central bank to prevent further sharp rupee gains in order to protect exporters' interest, they added.
The rupee at its current levels remains fairly valued on a trade-weighted basis against the dollar. Given the dollar's recent gains against major global currencies, the Reserve Bank of India (RBI) would be averse to any further sharp rupee gains, bankers said.
Bureau Report