The Reserve Bank of India (RBI) has been actively purchasing dollars over the past two days at Rs 35.87, the highest level in the past six months.
According to treasury heads, the RBIs aggressiveness in mopping up dollars at these levels is going to keep the rupee weak over the coming days. This is an unofficial attempt on its part to devalue the rupee, said a dealer with a foreign bank.
The RBIs operations have been necessitated by the fact that while the dollar continues to rule strong against other major currencies, it has remained steady against the rupee. This, combined with a rising domestic inflation rate, has been threatening to erode the countrys export competitiveness.
According to treasury heads, the fundamentals of the economy demand a depreciation in the value of the rupee. This will help reduce the interest rate differentials between the Indian economy and its major trading partners, namely the US, the UK, Germany and Japan.
The rupee has been remaining rock steady against the dollar, ruling in the range of 35.845-85 to 35.88-89.
