Rupee Stages Recovery On Sbi Support

The rupee staged a smart come-back yesterday to close well within the Rs 44 mark. The recovery resulted from the State Bank of India move to sell dollars all through the day.

The rupee opened at 44.03, a little higher than Wednesday's closing, and moved up through the day to close at Rs 43.8750. Dealers said there were no signs of intervention by the Reserve Bank.

Dealers said the nationwide workers' strike had no impact on trading. "It was a normal working day. Everyone_the State Bank of india, the nationalised banks and the foreign banks_was selling," said Alok Sharma, head of foreign exchange trading, Bank of America.

 

The market did not see much movement yesterday. "There was not much panic in the market today, like yesterday. The importers were content with just waiting, instead of rushing for cover," said a dealer with a private sector bank.

He added, "There was good movement and healthy trading today, reassuring the importers to wait.

"Yesterday, everyone was caught off guard, with RBI also not making any announcements to that effect. The panic was instinctive and caused the volatile movement. Today, everyone was content to wait and watch."

Nationalised banks were said to be pumping in dollars, almost in concert, instilling confidence in the market that dollar supply will be adequate to meet the demand in the market.

"The real test comes tomorrow (Friday) when everyone will be in the market again. Despite the strike not really affecting the trading, we hope that when the deep-seated demand shows itself, the supply should be adequate. Otherwise, it will be repeat performance of Wednesday," said a dealer with a foreign bank.