Rupee losts 38 paise against USD during the week
Mumbai, Feb 23: The Rupee witnessed a steep fall by 38 paise to hit more than five month low at 40.04/06 against USD amid high volatile trading sessions in the forex market in the week ended February 22.
Resuming the first session on Monday with a marginal gain at 39.65 per dollar on positive note in the local equity market, the partially convertible Indian Currency moved in wide a range gap between 39.64 and 40.08 per dollar on bouts of alternate buying and selling of dollars, through out the week.
Sustained demand of dollars by the exporters and foreign banks in the inter-bank foreign exchange (Forex) market along with the strong outflows from the equity market, caused a sharp depreciation of rupee against the greenback, dealers said.
Heavy
buying
by
the
major
foreign
banks
including
HSBC
and
Standard
Chartered
bank
for
the
foreign
institutional
investors,
during
the
last
two
sessions
of
the
week,
pulled
the
rupee
to
a
weaker
end.
In
most
of
the
trading
sessions,
the
Reserve
Bank
of
India
was
in
selling
mode,
dealers
asserted.
However,
their
was
no
buying
support
by
the
public
sector
banks
as
most
of
them
are
facing
tight
liquidity
conditions.
Further, dealers opined that the fresh reports of US economy getting deep into recession and heightening possibility of rate cut by the US Federal Reserve could create a panic situation in the other markets including Asian and European markets in the near future. Whereas, rupee is expected to follow the trends in the local equity market, dealers added.
UNI