The rupee opened on a positive note on Tuesday, recovering almost 15 paise to open at 72.2962 against the US dollar. The domestic currency had tumbled nearly 93 paise to a fresh record low of 72.6738 against the greenback during afternoon trade on Monday, before staging a mild recovery to close trade at 72.4450, Bloomberg data showed.
Increased selling by banks and exporters, along with the dollar’s weakness against some currencies overseas supported the rupee, PTI reported quoting forex dealers.
A report by Geojit Financial Services said the rupee ended lower by 0.97% (at 72.45 against US dollar) on Monday from its previous close at 71.74/$. “The bond yields on the other side rose to their highest levels since Nov 2014,” the report said. “For Rupee, 72.77 will be a major level to watch below more weakness is expected. On the resistance side, 71.44 and 70.74 will be in focus,” it added.
In the domestic equity markets, the benchmark indices — Sensex and Nifty — traded flat after opening marginally higher on Tuesday. On Monday, both foreign and domestic institutional investors were sellers in the cash markets. Provisional data with the stock exchanges showed that FIIs sold shares worth Rs 841.68 crore and DIIs worth Rs 289.66 crore.
Following the plunge in the rupee on Monday, an official said that the finance ministry is in touch with the Reserve Bank for market intervention to check declining value of rupee. A PTI report said the RBI has been selling dollars to arrest declining rupee, which led to decline in forex reserves from $426 billion in April to $400.10 billion at the end of August. The official added that the RBI has sufficient foreign exchange reserve and the ministry is in touch with the central bank for timely market intervention.