Rupee breaches the 48-mark
18 September 2001
Mumbai: The rupee breached the psychological 48-mark against the dollar to touch an intra-day low of 48.42 before closing at yet another low of 47.85/90.The recovery was a result of RBIs direct intervention. Late support from a few state-run banks also helped the rupee recover some of its losses. At its lowest, the rupee had weakened by around 3.5 per cent against the dollar since the start of this year, compared with an average annual depreciation of 5-6 per cent.
According to dealers, the dollar-supplies from large state-run banks may have been on behalf of the RBI.
The RBI on 15 September had assured the markets of meeting any temporary mismatch in demand and supply of dollars through direct and indirect interventions. The market is nervous, but there is no panic. The central bank is closely watching the situation and will step in to lend confidence to the market, a RBI source said.
The rupee was pulled down by sustained heavy dollar demand from all quarters in the face of an acute shortage of supplies, even as the global political situation became more fluid.
Dealers expect the rupee to stabilise at the current level, now that the market is aware of the RBI resolve to support the rupee and prevent any further excessive speculation. Exporters should now come in with their receivables, as the RBI has shown its determination to defend the rupee and bridge any demand-supply mismatches, the dealers feel.