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Rupee plunges further; RBI stays out

In the absence of support from the Reserve Bank of India, the rupee on Thursday came under heavy pressure from speculators as well as corporates to register a new low of Rs 36.25 against the US dollar in the late interbank foreign exchange (forex) market.

Opening at a nearly steady level of Rs 35.92/98 per dollar, the rupee immediately drifted to Rs 36.05/10 on massive selling interest from arbitrageurs. The increased demand for US dollar by the corporate sector also added to the down fall of Indian rupee.

According to leading forex dealers, the rupee ruled almost at Rs 36.05/10 levels till 1500 hours IST. The market had almost closed at Rs 36.08/10 per dollar, but the entry of the State Bank of India at the fag end dipped the value to Rs 36.20/25 as there was no corporate supply. Moreover, with Friday being a bank holiday on the occasion of Parsi New Year, the banks, who were holding back their positions, also came forward in a big way to cover up their positions.

They said that the RBI's absence from the market since Wednesday also had a major impact on the rupee's depreciation.

Meanwhile, the forward premiums for the six-months was earlier reported lower by about 20 paise over its previous levels in a smooth trading. Towards the close, the State Bank entered the market and the forward premiums again firmed up.

The cash to spot dollar was quoted at 1.25 to 1.50 paise premium for the day.

The dealers said that the rupee is expected to open at the same levels on Monday.

On the other hand, the overseas market witnessed a rather quiet market with not much activity, a dealer said.

The near forwards were reported more or less in the same range over Wednesday's levels: spot/August 2-4, spot/September 23-28, spot/October 44-49, spot/November 65-72, spot/December 82-92, spot/January 105-115, spot/February 130-140, and spot/March 140-150 paise premium respectively.

Elsewhere, the Reserve Bank fixed the reference rate at Rs 36.08 per dollar for Thursday.

UNI