Rupee falls to 48.82 as banks rush for dollars

The rupee ended down against the dollar as banks bought the greenback noting persistent outflows from foreign funds on a sharp fall in local share indices.

However, dollar sales from the Reserve Bank of India through government-owned banks helped the rupee trim some intraday losses, dealers said. The Indian unit closed at 48.82 to a dollar, weaker by around 30 paise from 48.52 on Wednesday. It moved in 48.63-49.08 range intraday.

“There is an FII outflow from the local share market. Unless there is an improvement in the availability of dollars overseas, the current situation may persist for the spot rupee,” said K Rajaram, head of forex, Arvind Mills.

Rajaram expects the rupee to remain volatile in the near term. “There was demand from FIIs as we have been seeing over the past few days with fall in stocks. But soon nationalised banks came in and sold dollars offering some support to the rupee,” said a dealer of a UK bank.

The Bombay Stock Exchange’s 30-share Sensex ended down 2.11 per cent, while the National Stock Exchange’s 50-share Nifty ended down 2.07 per cent today from Wednesday’s close.

Some banks also bought the greenback noting a rise in the non-deliverable forward (NDF) rate, dealers said.

At 3:15 pm, the one-month dollar/rupee NDF rate was 49.60, while the local outright rate was 48.84, leading to an arbitrage opportunity of about 76 paise.

“There was mild arbitrage between the offshore and onshore markets despite the wide gap in the two markets today,” said a dealer of a US bank.

The greenback’s rise against most Asian currencies also prompted some banks to buy dollars today.