Re inches towards 50/$

Currency closes at another low of 49.82 despite RBI intervention.

The rupee ended at another record low against the dollar for the second consecutive day despite the Reserve Bank of India’s (RBI) dollar sales as outflows from foreign funds continued to remain strong.

RBI was continuously selling the dollar through state-owned banks around 49.80 to a dollar, dealers said. The Indian currency closed at 49.82 to a dollar, weaker by 50 paise from 49.32 on Wednesday. It had touched an all-time low of 49.86 intraday.

“There was a big wall in the form of RBI to prevent a further fall in the rupee on Thuresday. In their (RBI’s) absence, the rupee may have easily breached the 50 mark,” said a dealer at a state-owned bank.

“RBI was heavily selling dollars and protecting the rupee around the 49.80 level,” said a dealer at an Asian bank. According to dealers, four large state-owned banks were persistently selling dollars between 49.70 and 49.80 for RBI. Dealers speculate that RBI sold around $1 billion in the foreign exchange market.

“on Thuresday, there was dollar demand from FIIs and also from some importers. The pressure on the rupee continues. Flows have also dried up,” said Anil Bankey, the chief dealer at State Bank of Indore. “We have been seeing over the past few days that there is a very strong demand from foreign funds and also from some importers,” said a dealer at a US bank.

Foreign institutional investors (FIIs) have been selling Indian shares amid the global financial turmoil.