Indian rupee hits 5-month intraday low of 61.74; ends 7 p up Vs dollar

Written by PTI | Mumbai | Updated: Aug 8 2014, 23:57pm hrs
The Indian rupee today plunged by 52 paise to five-month low of 61.74 against the US dollar with oil prices rising amid geopolitical tensions, but the domestic currency managed to close seven paise higher at 61.15 on suspected RBI intervention in the Forex market.

At the Interbank Foreign Exchange (Forex) market, the rupee commenced sharply lower at 61.64 a dollar from last close of 61.22 and dipped further to a low of 61.74, a fresh 5-month low, on sluggish local stocks and initial dollar demand from importers.

However, it later rebounded to a high of 61.14 before ending at 61.15, a rise of seven paise, or 0.11 per cent.

US President Barack Obama yesterday authorised targeted air strikes in Northern Iraq as well as tensions in Libya and between Israel and Gaza, which weighed on the dollar and it was trading down by 0.17 per cent.

Adding to the worry of global investors, Russian President Vladimir Putin went on retaliatory measures by banning food imports from Western countries. Russia faces sanctions imposed by the US and European countries.

Exporters and some banks also sold dollars towards the fag-end. However, steep fall in domestic equities amid fresh capital outflows restricted the rupee rise to some extent.

" session's close, the rupee appreciated on heavy selling of US dollars by banks and exporters. Speculative reports of a central bank intervention and broad dollar weakness also strengthened it," Admisi Forex India said.

BSE Sensex today plunged by 260 points or 1.02 per cent, to end at of 25,329.14. FIIs sold shares worth Rs 503.74 crore today, as per provisional data with stock exchanges.

Pramit Brahmbhatt, CEO, Veracity Group said, "The rupee opened low taking cues from weak local markets. It traded as low as 61.74 during the day but towards the end it recovered as RBI intervention was suspected through state run banks which supported Rupee and helped it to finally appreciate."

Benchmark US crude oil for September delivery rose to USD 97.95 a barrel in electronic trading on New York Mercantile Exchange. Brent crude, which is used to price oil sold internationally, rose to USD 106.63 in London.

Stem in rupee fall suggested a possible RBI intervention today, said Kiran Kumar Kavikondala, Director & CEO, WealthRays Securities.

In the forward market, premium ended slightly lower on continued receipts by exporters.

The benchmark six-month premium payable in January ended a tad lower at 243-245 paise from 243.25-245.25 paise previously and far-forward contracts maturing in July, 2015 also declined to 488-490 paise from 489.5-491.5 paise.

The Reserve Bank of India fixed the reference rate for dollar at 61.5575 and for the euro at 82.4125.

The rupee improved further against the pound to 102.79 from overnight close of 103.16 and also edged up against the euro to 81.88 from 81.89.

However, it fell back to 59.97 per 100 Japanese yen from 59.86.