After the recent steps taken by the Reserve Bank of India (RBI), rupee opened strong on Monday but finally closed weak at 61.28 per dollar, falling 0.6 per cent. The currency had touched a month high of 60.49 per dollar in the first half of trade on back of further liquidity tightening measure by the RBI. Rupee has been one of the weakest currency in Asia as it fell 9.43 per cent since January 2013.
But as the session progressed, rupee lost all of its gains due to dollar demand from importers and also because the dollar index rose in anticipation of increased retail sales data which is going to be released on Tuesday. Experts said that if the retail sales increase, it would only back Federal Reserve’s case to curd bond purchase, adding more pressure on rupee.
On the hand, Finance Minister, P Chidambaram declared government’s intention to compress their imports along with other measures to check rupee slide and contain Current Account Deficit (CAD).