MARKET HEADLINES
- Rupee gains against dollar, backed by stock market gains
The rupee strengthened
and hit day's high of 62.49 against the dollar in
trade today at the
Interbank Foreign Exchange on fresh selling of the US
currency by
exporters and banks.Forex dealers said besides selling of the
American currency by exporters and banks, a higher opening in
domestic
stock market supported the rupee but the dollar's strength
against other
currencies overseas, limited the gains.
he rupee had
eased by two paise to close at fresh two-month low of 62.78
against
the Greenback in yesterday's trade on sustained demand for the
US
dollar from importers.
- To protect forex reserves, RBI may offer only limited support to rupee
A strong dollar has hit
all emerging currencies, including the rupee in the
past few
days.However, currency traders and economists expect only
limited
dollar sales by the Reserve Bank of India (RBI) to stem the rupee's
fall, as such an intervention may thwart the central bank's efforts
to shore
up forex reserves.
The central bank intervenes both ways
-it buys the US currency to check
sharp rupee appreciation and sells
to rein in the local unit's deep
depreciation. ts stated policy is
to intervene only to curb excess volatility.
The RBI has been buying
dollars in the past few months to shore up forex
reserves after it
had used them to arrest the rupee's sharp plunge two
years ago.
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