Rupee hovers near 60-a-dollar level despite fears of RBI intervenion

The rupee closed at near record lows of 59.68/69 against the US dollar on Monday as foreign investors continued to offload debt and equities on the Indian markets. Fears of intervention by the Reserve Bank of India (RBI), however, helped the Indian currency close the day above its historic lows below the 60 a dollar level.

The rupee, which commenced trading on the interbank foreign exchange market at 59.67 a dollar, 40 paise below the previous day's closing level of 59.27/28 a dollar and fell further to 59.8250 a dollar before closing at 59.68/69 per dollar.

Foreign funds are reported to have sold a net $5.33 billion in rupee debt since 22 May.

In the offshore non-deliverable forwards, the one-month contract was at 60.14, while the three-month was at 60.84.

In the currency futures market, the most-traded near-month dollar/rupee contracts on the National Stock Exchange, the MCX-SX and the United Stock Exchange all closed around 59.79 with a total traded volume of $6.4 billion.

RBI has not intervened in the market although RBI deputy governor Anand Sinha said the central bank and the government are doing whatever is needed to get a "hold over" the deteriorating macro economic conditions.

Market men are now awaiting the release of the current account deficit data on Friday, which will underline whether the funding pressures for the economy will further rise.

Global brokerage firm Standard Chartered today lowered forecast on the rupee value for the year-end to 60.5 from 53 on the back of continued strength in US dollar, persistent outflows from Indian markets and low probability of strong policy measures to stem rupee losses.