At 3.20 p.m. local time, the rupee was trading weak by 28 paise at 59.58 against the dollar due to increased demand for the American currency.
The rupee gained 5 paise to 59.30 per dollar versus the previous close of 59.35 on the back of reported intervention by the Reserve Bank of India in the last one hour of trading on Friday.
Earlier last week, the RBI had announced measures to squeeze rupee liquidity to stabilise the depreciating rupee.
The central bank limited the amount that banks borrow from it to Rs 75,000 crore and announced Rs 12,000-crore worth of open market operation sale of government securities to suck out liquidity.
Further, the Marginal Standing Facility (MSF) rate was increased to 10.25 per cent from 8.25 per cent.
However, market players are concerned about the success of the steps taken by RBI after it rejected most bids at a bond auction where institutional investors demanded higher yields.
“Technically, USDINR is seen correcting and we can see it appreciating below 59.00 levels, but again the gains will be temporary. Importers were advised to start covering partially on any major dip seen in the market,’’ said Abhishek Goenka, Founder and CEO, India Forex Advisors.
