Rupee falls 16p to 75.52 as RBI stays away from market

MUMBAI: The rupee weakened by 16 paise to close at 75.52 against the US dollar on Tuesday as the greenback continued to gain in international markets. Rising crude oil prices also kept pressure on the domestic currency.


Dealers said that while capital flows continue to remain strong, the dollar was gaining in strength and no large-scale intervention was seen from the central bank. Intraday, the rupee had weakened to a low of 75.66. In the absence of major purchases by the RBI, traders are expected to keep testing new levels. “There may have been intervention from the RBI at higher levels, coupled with lumpy corporate flows which pushed prices lower, but rising oil prices and firming US bond yields kept bids alive,” said

Kotak Securities

deputy vice-president Anindya Banerjee.

Forex

consultancy firm

IFA Global

said in a note to clients that the rupee was relatively overvalued and volatility was close to a multi-year low until a few weeks ago. “The RBI therefore seems to be content seeing the overvaluation get corrected,” the note said.