Mumbai: Rupee recovered some of its losses against the dollar as banks reduced their US currency positions responding to reports that the Reserve Bank of India (RBI) may consider liberalizing external commercial borrowing (ECB) norms to help debt-laden Indian companies and also attract foreign inflows.
Bloomberg TV reported that India may allow companies to raise ECBs to refinance their debt later Wednesday. The reports triggered dollar sales by banks as they adjusted their positions expecting increased US currency inflows from such loans taken by companies.
At 2.30pm, the rupee was trading at 61.08 per dollar, down 0.44% from the previous close of 60.81. It opened at 61.26 and touched a high and a low of 61.07 and 61.45, respectively.
“Nobody knows in what form the new norms are going to come but that is what has triggered the upward movement in the rupee. There is expectation that some new measures will be announced before the end of the week,” said a dealer with a French bank. He expects the rupee to trade in the 60.70-61.30 per dollar band on Wednesday.
Since January, the rupee has weakened 10.30% and is the second-biggest loser after the yen among Asian currencies.
The dollar index, which measures the US currency’s strength against major currencies, was trading at 81.718, up 0.13% from the previous close of 81.603.
India’s benchmark Sensex was trading at 18738.11, up 0.03% from the previous close.
The 10-year bond was trading at 8.171%, down 3 basis points from the previous close of 8.209%. It opened at 8.205% and touched a high and a low of 8.205% and 8.162%, respectively.
The call money rate was at 10.15%, up from the previous close of 10%. It opened at 9.75% and touched a high and a low of 10.25% and 9.35%, respectively.
