Mumbai: The rupee was trading above 53.80 in noon on Friday as stocks tumbled after minister of state for finance S.S. Palanimanickam said the government is reviewing tax treaty with Mauritius, sparking fears of outflows.
Bulk of India’s foreign investors are believed to be based in Mauritius.
Oil demand also spurs bids for USD/INR, last at 53.81/82 vs 53.41/42 on Thursday close.
Some selling by foreign banks on likely squaring-off of weekend positions pushed USD/INR off perch, dealers say.
No signs of RBI intervention spotted, dealers added. Limited upside for USD/INR, as stochastic and RSI near historic tops, IFR says.
Dealer tips 53.55-53.85 band for session.
The rupee on Friday lost 31 paise to 53.72 -- a fresh four-and-a-half-month low -- against the US dollar in early trade on the Interbank Foreign Exchange market due to increased demand for the American currency from importers.
Dealers attributed the rupee’s fall to a lower opening in the stock market and strong demand for the dollar from importers.
The domestic unit had lost a hefty 45 paise to close at four-and-a-half-month low of 53.41/42 against the dollar on Thursday, owing to strong dollar demand amid weak equities.
