The Rupee on Friday came down close to the psychological 50-level mark at Rs. 49.90 during intra-day as the growing Euro crisis further pushed up the demand for dollar globally.However, The Rupee bounced back to end the day 14 paise up at Rs. 49.44 which can be totally attributed to the Reserve Bank intervention twice during the day.What I Think is that the rupee may further come down to the sensitive Rs. 52-mark, if not breaching this level, in medium term unless Europe stablized.
In a see-saw trade at the Forex market, the Rupee opened lower at Rs. 49.60/61 and later plunged to a low of Rs. 49.90 — a fresh more-than 28-month low level — on continuous signs of fund outflows and sustained dollar demand from importers, mainly oil refiners, and some banks.Plus intervention in the forex market, if any, would be limited to curbing volatility, but as of now, the situation does not call for any action even though the rupee has fallen to its weakest level in 28 months.
StanChat Treasury Head Ananth Narayan, said it certainly looked like RBI intervened in the market twice in the day. Had it not been RBI’s role, the rupee would have breached the Rs. 51-mark on Friday.In last straight four trading days, rupee has declined by 231 paise or 4.89 per cent.All I see here is that Indian policies on the Forex market and currencies are very short sighted and weak because rupee is falling when other economies are weakening but still their currency’s demand is growing.