Rupee pares early losses against dollar, still down by 19 paise - NDTV

The content may have been removed, or is temporarily unavailable. We apologize for the inconvenience. Please try again later. The rupee recovered marginally against the US dollar on Wednesday after hitting an over two-month low. However, it was still weaker than Tuesday's close of 55.10 on fears of a weak Q2 GDP number and fiscal slippage. At 12:47, the rupee traded 19 paise or 0.34 per cent lower at 55.29 to the dollar after hitting the day's low of 55.37, a level last seen on September 13. Experts now see the currency moving towards 55.60 after breaching the key level of 55.20. "The rupee is still expected to be weak with some dips in between," said India Forex Advisors in a report. The rupee has also been hit by strong demand for dollar from oil companies and banks. The stock markets continued to see muted trade today, in line with the trend all of this week, as uncertainty around the Winter Session of Parliament has hit sentiment. The currency has now weakened by 3.37 per cent in the last one month, reversing its gains after the government announced a slew of reforms in September. The rupee had fallen sharply in June, mirroring declines in May, and went on to hit its lowest level of 57.33 on June 22, weighed by domestic worries and global risk aversion on account of the Euro crisis. Experts are now calling for the Reserve Bank of India (RBI) to intervene in the forex market and buy dollars to recoup the rupee. Stating that lending rate cuts and higher forex reserves hold keys to the market and growth recovery, a BoA-ML India report authored by its chief economist Indranil Sen Gupta said, "the rupee will remain volatile till RBI recoups the forex reserves of $65 billion, including the forwards which it had sold since the 2008 global credit crisis following the fall of Lehman Brothers." However, RBI deputy governor Subir Gokarn indicated last week that the RBI will intervene only in case of excessive volatility in exchange rate. "Our approach has been that the exchange rate of the rupee should be market determined and the Reserve Bank should be intervening only to manage excessive volatility... without targeting any particular level or band," Gokarn told an RBI-ADB conference on 'Managing capital flows' on Monday. With inputs from PTI, Reuters via Business - Google News

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