Rupee Closes Weaker On Sbi $ Demand

The rupee ended yesterday at 37.46/48 to a dollar, weaker compared to the previous close of 37.40/42, despite central bank intervention, dealers said. The rupee opened to wide quotes of 37.40/45 and early inter-bank covering ahead of anticipated dollar demand saw the currency dip to 37.46/47 levels, dealers said.

The State Bank of India (SBI), whose dollar demand has been moving the market in recent days, initially did not show buying interest and the rupee saw a high of 37.40 yesterday, they said.

Some banks reported exporter dollar sales yesterday, prompted by the belief that the Reserve Bank of India (RBI) will not allow the rupee to breach the 37.50 level in the near-term. The RBI had intervened on Tuesday after the rupee plunged 1.4 percent to trade at a 21-month low of 37.52 to a dollar.

Some dealers said they saw more of importer cancellations rather than exporter dollar sales today.

The rupee began weakening again yesterday afternoon after the SBI began bidding for dollars, dealers said. The rupee saw a low of 37.49 yesterday, they said.