Mumbai: The rupee remained weak against the dollar but trade was thin after Reserve Bank of India (RBI) opened a special window for oil retailers to buy dollars last week. “The volatility in the exchange rate has come down and it looks like RBI’s move to take oil companies’ dollar demand out of the market has worked,� said a dealer with a French bank. He declined to be named. At 2.20PM, the rupee was trading at 66.19 per dollar, down 0.74% from the previous close of 65.7050. It opened at 66.1050 and touched a high and a low of 65.68 and 66.2988, respectively. Since January this year, the rupee has weakened 16.95% and has lost the most among Asian currencies during that period. The dollar index, which measures the US currency’s strength against major currencies, was trading at 82.126, up 0.05% from the previous close of 82.087. Last week, RBI opened a foreign exchange swap window to meet the daily dollar requirements of state-run oil marketing companies (OMCs). Through this window RBI will sell dollars to these companies for a fixed tenure—probably three months—with an understanding that OMCs will return the dollars on expiry of contracts. “Over the weekend, tensions that US and its allies will attack Syria have also subsided after Britain’s Parliament did not approve the plan and the US president still awaits a Senate approval. All these factors have prevented the rupee’s slide today,� the dealer said adding that dollar sales from public sector banks likely on behalf of RBI also helped the rupee. India’s benchmark Sensex was trading at 18,904.43, up 1.56%, or 290 points, from the previous close. The benchmark 10-year bond yield was trading at 8.466%, down 0.14 basis points from previous close of 8.609%. It opened at 8.59% and touched a high and a low of 8.592% and 8.461%, respectively. India call money rate was trading at 10.25%, unchanged from previous close of 10.25%. It opened at 10.30% and touched a high and a low of 10.40% and 9.10%, respectively.

Source