The rupee extended its gains, creating a new nine-year high of 39.48 to a dollar at close on Thursday in Mumbai. The market was one-sided with only sellers of dollars.
The rupee opened at the previous day?s close of 39.58/59 a dollar and weakened to 39.63 as dollar sales were held back on expectations of a further weakening of the domestic currency. The Reserve Bank of India (RBI) showed no signs of intervention until around 1.45 pm when the dollar was at 39.47/50 levels, dealers said.
RBI interceded during the second half of trading to prevent steeper appreciation of the domestic currency. ?No sooner did the RBI step in, than there were heavy dollar sales,?? a dealer at a private bank said. ?Despite this intervention, the rupee appreciated sharply to 39.36 in about five minutes,?? he added. State-owned banks like SBI, Canara Bank, Bank of India and Bank of Baroda continued to buy the greenback, thereby corralling the rupee to 39.47/48 at close, dealers said.
Dealers now expect the rupee to strengthen further on Friday. Most dealers predict the rupee to touch the 39-a-dollar level by month end. By the end of the current fiscal, they expect the rupee to be around 36-a-dollar levels.