Moving up for the second straight day, the rupee on Friday gained a whopping 54 paise to end at 55.54 against the dollar on persistent dollar-selling by exporters amid the Reserve Bank of India hinting at opening a separate dollar window for oil firms.
In volatile trade, the rupee resumed lower at 56.25, as against Thursday’s close of 56.08 at the Interbank Foreign Exchange (Forex) Market and hovered between 55.53-56.28 per dollar before settling the day at 55.54 per dollar.
On Thursday, it recorded a low of 56.52 against the dollar.
As a measure to contain dollar demand and help support the rupee, the Reserve Bank on Friday hinted at opening a separate dollar window for oil companies.
“The option (of opening a separate dollar window for oil companies) is open. Whether they (RBI) is doing it or not, I don’t know, because it will not be done in the public view,” RBI Deputy Governor K.C. Chakrabarty told reporters.
With India importing about 80 per cent of its crude oil requirements, selling dollars directly to oil firms is expected to ease pressure on the rupee, dealers said.
“The appreciation in domestic currency today happened in anticipation of some policy action next week from the government or RBI side,” said T.S. Srinivasan, GM (Treasury), Indian Overseas Bank.
N.S. Venkatesh, Treasury Head, IDBI Bank said corporates selling dollars during the day also supported the rupee.
A sharp deceleration in imports during April resulted in trade deficit narrowing to $13.2 billion. The drop in the balance of trade deficit is expected to reduce pressure on rupee that has lost 15 per cent since September, 2011.
Meanwhile, Indian stocks on Friday registered a sharp fall with the Sensex taking a 253-point plunge to close below the 16,000 mark, the first time in a week.