Despite a heavy battering, the rupee today made a smart recovery to close at 63.25 after hitting a fresh low of 64.13 against the US dollar, helped by massive intervention by RBI.
At the Interbank Foreign Exchange (Forex) market, the domestic currency commenced sharply weak at 63.75 a dollar from overnight close of 63.13. It sank below 64-mark to historic low of 64.13 on sluggish local stocks and continued dollar demand from importers.
However, the rupee later recovered smartly on dollar selling by RBI and exporters. It touched the day's high of 63.15, before settling at a closing low of 63.25, a fall of 12 paise over yesterday's close.
"The RBI was seen selling dollars via state-run banks around the 64.00 levels which helped rupee to trade stable and recover slightly," said Pramit Brahmbhatt, CEO, Alpari Financial Services (India).
Forex dealers said the intra-day movement from the rupee against the dollar from 61.65 to 64.13 was swift.
"The US dollar was also seen weakening internationally before the FOMC minutes which is due for Wednesday. We will be looking at the July minutes for potential details on the process for tapering as well as the level of conviction within the central bank," said Abhishek Goenka, Founder & CEO, India Forex Advisors.
Experts forecast spot Rupee to fall down further as dollar demand from defence & oil importers will force the local currency to trade near the 64.50 level in coming days.
Meanwhile, the Indian benchmark S&P BSE Sensex today declined by another 61 points while Foreign Institutional Investors (FIIs) sold shares net Rs 680.08 crore yesterday as per provisional data from stock exchanges.
