The rupee weakened by 19 paise and closed at 52.25/26 against the dollar on Friday following fresh demand from importers and weak equity markets. Increased capital outflows and firm dollar overseas kept the rupee under pressure.
Meanwhile in Chandigarh, Reserve Bank of India Governor D. Subbarao said, “RBI is watching the rupee movement. We have taken some action. Whether we will intervene in foreign exchange market or not, it is that I cannot tell you (at the moment).”
“What is important for managing the exchange rate is that we should reduce the risk to Indian business sector,” he said.
At the interbank foreign exchange market, the rupee opened lower at 52.15/16 a dollar against Thursday's close of 52.06/07.
It immediately touched a high of 52.06 on late morning recovery in stocks amid expectations of intervension by the central bank and government's efforts to encourage foreign investments by liberalising some proposals.
However, the rupee dropped to an intra-day low of 52.46 on late sell-off in equities amid fresh dollar demand from importers, mainly oil refiners, to meet their month-end needs.
The dollar index, consisting of six major currencies, was up by nearly 0.5 per cent while New York crude oil was trading above $95 a barrel in European market on Friday. — PTI