After an extremely volatile run in 2000, the rupee remained relatively stable throughout 2001 except for brief spells of volatility and lost only 3.56 per cent (Rs 1.60) to a dollar in contrast to over 7 per cent fall (Rs 3.10) witnessed in 2000.
In the beginning of the year, the rupee was at 46.60. In mid-April it crossed the 47-mark, triggered by the corporate demand for the greenbacks, and on April 17 it closed at 47.10. The Indian currency retained this level till July 2 when it closed at a new low of 47.21. After September 11 terrorist attacks in the US, nervousness gripped the forex market and on September 21 the rupee closed below the 48-mark (48.02) and went down to 48.12 on October 8.
The Indian unit, however, recovered since then on the back of huge inflow of remittances from abroad. However, the current border tension forced a further weakening in the currency which closed at an all-time low of 48.28 on Friday.
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The relative stability in the rupee as compared with the last year can be well explained by the performance of external sector where export performance was disappointing due to a worldwide recession. But the import growth was lower too as the oil prices were stable.
In the first 10 months of the calendar year (January-October) export was at $34.60 billion, little changed from the figures of the comparable corresponding period of the last calendar year. Export growth in the first 10 months of 2000 was more than 23 per cent.
Import was also lower at $37 billion in 2001 as compared with $41 billion during the corresponding period of the last calendar year. The import growth was at 24 per cent in 2000.