The rupee dived to a record low of 61.21 against the dollar on Monday after better-than-expected US jobs data raised concerns about the US Fed easing its stimulus programme but the currency regained some lost ground to close at 60.61 after the Reserve Bank of India intervened.
The rupee opened at 60.95 a dollar compared with Friday’s close of 60.22 and dipped to 61.21, past its previous all-time low of 60.76 on June 26. local shares were sluggish amid sustained dollar demand from importers, mainly oil refiners.
The rupee bounced back after the RBI intervened through public sector banks, reaching a high of 60.58 before settling at 60.61, still a fall of 39 paise, the second straight day of losses.
“After US non-farm payrolls data, rupee was expected to open with steep losses. However, RBI was seen selling dollars which helped rupee recover,” said the forex head of a leading private bank.
A falling rupee has a cascading effect on inflation as imports like oil become costlier, widens the current account deficit and increases the risk of capital outflows.
“Expect spot rupee to trade over 62 levels in coming days,” said Pramit Brahmbhatt, CEO, Alpari Financial Services. The benchmark S&P BSE Sensex on Monday fell 171.05 points, or 0.88 per cent, while FIIs sold shares worth Rs 204.46 crore, as per provisional data with the BSE.