Breaching the historic low of 57 levels, the rupee continued its free fall by declining to 57.30 against the dollar on global risk aversion and rising demand for dollars from foreign banks and importers.
At 1 p.m., the rupee was trading at 57.24 to the dollar after hitting an all-time low of 57.30 against the greenback. It moved to a high of 56.76 in the day’s trade.
The domestic unit closed lower at a record close of 56.30 on the Interbank Foreign Exchange market after RBI intervention as it hit a low of 56.57 per US dollar in the intra-day trade on Thursday.
Dealers do not see huge trade volumes without any sellers on the dollar side.
“There has been heavy buying for dollars by foreign banks. Also, the decision for opening up of windows for oil importers has been uncertain creating jitters among the investors and traders,” said a chief dealer of a public sector bank. “We expect the rupee to hold at 57.30 levels for the day.”
The Oil Secretary, Mr Girish Chandra Chaturvedi, said that the RBI has asked oil companies to buy 50 per cent of their dollar demand from PSU banks.
Traders are hopeful of some RBI intervention in the day to contain the slide and increasing loss of confidence among investors.
Meanwhile, the equity market benchmark index -- Sensex recovered at 112 points or 0.66 per cent low, recovering from a 200 points decline.
Call Rates and Government Bonds
The call money rates were trading steady at 8.25 per cent from 8.20 per cent. The rates are moving between the 8.10 to 8.25 per cent range in the interbank call money market.
The 9.15 per cent government security maturing in 2024 was trading higher at Rs 105.94 (with a yield of 8.36 per cent) from Rs 105.73 (with a yield of 8.40 per cent) on Thursday.
The 8.79 per cent bond maturing in 2021 climbed higher at 102.97 (with a slightly lower yield of 8.32 per cent) from Rs 102.56 (with a yield of 8.34 per cent).
