RBI move helps, rupee gains 7 paise over US dollar

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Mumbai: Snapping a eight-day long losing streak, the Indian rupee today ended stronger by seven paise at 49.88/89 against the American currency, after depreciating to new record during the day.

Foreign exchange dealers said an aggressive intervention by the Reserve Bank of India (RBI) and impressive intra-day recovery in local stocks helped the domestic currency bounce from record low level of 50.26.

In the past eight days the local unit had lost a massive 186 paise, or 3.87 per cent, largely due to fears of sustained capital outflows on apprehensions of financial crisis in US spreading to all parts of the globe.

In volatile trade at the Interbank Foreign Exchange (forex) market, the domestic currency moved widely in a range of 49.87 and 50.26.

It had opened lower at 50.07/08 a dollar from its last close of 49.95/96.

Dealers said rupee tumbled to its intra-day record low of 50.26 against dollar in sync with a fall in Sensex.

They said the RBI came to the rescue of the Indian unit through public sector banks which are believed to have aggressively sold dollars after it hit an all-time trading low of 50.26.

They said oil refiners, however, bought dollars for their monthly import payments.

The domestic currency had fallen to a intra-day record low of 50.15 on Friday even as the Reserve Bank of India kept all bank rates unchanged in its mid-term review of monetary policy on October 24.

The rupee has been under consistent pressure because on sustained capital outflows from equity.