Rupee weak as RBI intervenes to cap gains
Rupee weak as RBI intervenes to cap gains Indian Rupee weakened on September 21, as the Reserve Bank of India intervened in the forex market to cap gains by buying Dollars. Since last three consecutive days, Rupee have gained momentum .The gain in local currency is a hurdle for exporters to reap profits, especially the IT sector. Usually, the central bank comes to the aid of exporters by purchasing Dollars. Today, the Dollar was in demand on aggressive purchase by the central bank. Further, the oil importing companies also bought Dollars in the wake of surging crude oil prices, which already crossed the mark of USD 80 barrel. With high crude oil prices, Rupee was in pressure on the above reasons. However, Rupee promises to be strong in the near future on the wake of Fed cut. It is important to maintain a certain amount of liquidity via Rupee appreciation on uncertainty of liquidity conditions in the glob al market. Long term subprime effects are yet to be known. In addition to that, there is speculation that in order to curtail Rupee appreciation, the apex bank could cut interest rates in the future. Indian Rupee closed at 39.90/91 a Dollar, as against Thursday`s close of 39.89/90.
