Weaker Rupee closely eyeing RBI review

Mumbai, July 29: Ahead of the Reserve Bank Policy Review on July 31, Rupee stood highly volatile in past week, touching a fresh nine-year peak on July 24 and a three-week low on July 27.

Sensex, which tumbled by 3.4 per cent on Friday, with a massive loss of 542 points to settle at 15,234.57, had a telling impact on the sensitive Rupee, which fell in proportion with the crashed indices.

Rupee lost 17 paise on Friday and ended at 40.50/51 from its Thursday closing of 40.34/35.

Ironically, Rupee had touched a fresh nine year high of 40.2050 per dollar on Tuesday, only two days before its sharp fall.

''Rupee's fall was certain as Sensex showed signs of weakening on Friday morning. Also, the unit was closely following bourses over the past few weeks,'' said Indrajith Sen Gupta, Chief Forex Dealer with Canara Bank.

If market sources are to be believed, overseas investors are keen on the upcoming credit policy review due on Tuesday, which many believe will direct the money markets in the months ahead.

As a measure to suck out the excess liquidity in the market, RBI is likely to put a hike in the Cash Reserve Ratio (CRR) rates, it is believed.

Rupee opened on Monday at 40.35/37 per dollar and closed the week's trade at 40.50/51 per dollar, registering a loss of 15 paise over the week.

Call rates opened the week at 0.30-0.50 per cent and closed marginally weaker on Friday at 0.20-0.30 per cent.

UNI