Heavy Sales By Banks Pull Rupee To 48.74

The rupee has touched a new low. The value of the dollar was Rs 48.7450/7600 today, below Rs 48.7150/7200 in the first week of February, because the state-owned banks resorted to heavy dollar buying.

Money market dealers said though there was enough dollar supply on account of remittances and as well as from foreign investments, the demand from the state-owned banks was more than enough to absorb it.

With today's fall, the Indian currency has weakend by 40 paise since the beginning of the month. Over 2001-02, the currency was weakened by 225 paise (4.83 per cent).

In February, there has been a good inflow via the foreign institutional investment route. As per the Securities and Exchange Board of India, during February 1-20, there have been inflows of $297 million as against $137.4 million in January.

 

However, export remittances have remained slow. Analysts feel the RBI has resorted to dollar buying through the state-owned banks to help exporters.

However, this was not reflected in the accretion in the forex reserves of the country because some other major currencies of the world dipped against the dollar.