Rupee trims most losses; RBI assurance on fx window for oil firms aids
Oct 18 2013 , Mumbai
The rupee had started the morning session by rising to a more than two-month high against the dollar, but then slumped after Bloomberg TV reported the RBI was considering closing its special dollar window for oil companies.
However, the RBI later issued a statement saying its dollar window for oil marketing companies remained open, adding that any tapering would be done in a calibrated manner.
That allowed the rupee to recover from session lows, although the currency still ended the day with a small fall.
"Rumors were driving the market around today, but think the currency should now stabilise between 60 and 63 in the near-term," said Uday Bhatt, a foreign exchange dealer with UCO Bank.
The partially convertible rupee closed at 61.27/28 per dollar compared to 61.23/24 on Thursday. In early trade, the rupee had gained to 60.92, its strongest since August 12. and later fell to a session low of 61.71 on the Bloomberg report.
On the week, the pair lost 0.3 percent, snapping two weeks of gains.
Stronger falls in the rupee were prevented as shares gained more than 2 percent to their highest close in nearly three years as banks rose on value-buying while blue chips gained as foreign investors extended their buying streak to a tenth consecutive session.
Meanwhile, the dollar fell to eight-and-a-half-month lows against the euro and a currency basket on Friday on speculation the fallout of this month's political impasse in the U.S. would prevent the Federal Reserve from scaling back monetary stimulus.
In the offshore non-deliverable forwards, the one-month contract was at 61.68 while the three-month was at 62.68.
In the currency futures market, the most-traded near-month dollar/rupee contracts on the National Stock Exchange, the MCX-SX and the United Stock Exchange all closed at around 61.33 with a total traded volume of $2.98 billion.