RBI stalls rupee''s fall
29 July 2004
bailed out the rupee from a further fall yesterday.
Indian Rail Finance Corporation's demand for the dollar
amounting to about $70 to $80 million caused the rupee
to plunge to 46.40. The RBI stepped in to prop the rupee
by releasing its dollar reserves and successfully brought
back the rupee into the range of 46.20 to 46.30. The
RBI sees 46.30 levels as crucial and is evidently supporting
the rupee from any major deviations.
The dollar high was capitalized by many banks, who were clued into the dollar demand hike by the PSU, sold off their excess dollar reserves and booked profits.
The RBI sold dollars at the 46.38 level during the last trading hour an estimated $100-150 million to stem the rupee's fall.
the international currency trade the dollar gained strength
and its value rose visa vis other currencies. The Japanese
yen reached 112.16 levels owing to the surging oil prices,
good US consumer data and low expectations from upcoming
Japanese preliminary industrial production report for
the month of June on the other hand.
dollar rose to 1.8166 levels against the sterling pound
given the lack of significant economic data forthcoming
from UK. Unfortunately even though three economic releases
are expected from UK tomorrow, including consumer credit,
money supply and the consumer confidence report most
of the reports are expected to remain unchanged.
in the Euro-zone, the M3 money supply growth rate unexpectedly
rose in June, raising concern over inflation prospects
throughout the region. The dollar being bullish rose
to 1.2010 per euro and is now at 1.2020 levels.
is expected to not go much further owing to the weaker
durable goods data than expected, a disappointing Fed
Beige Book report.
The reports indicated that the prices have been rising
for producers, but these producers have found it difficult
to pass these higher costs over to consumers.