The Hindu Business Line : Rupee steadies on RBI support

MUMBAI: The domestic currency plunged to 46.49/51 intra-day, near to its lowest in over a year as the inflation number at 7.51 per cent sparked apprehensions of the same rising further.

The rupee closed at 46.3750 per dollar, fairly unchanged from previous day's close as substantial supply of greenbacks in the market was witnessed towards the closing hours, said dealers.

The currency was perhaps supported by the central bank which is holding the rupee at about 46.50 levels, said a dealer with a private sector bank.

The rupee had closed on Thursday at 46.3750/3800 per dollar. The oil corporates were seen buying dollars in the early trading hours but with the news of a three-year high inflation figure the market participants were in a state of panic, said a dealer with a private sector bank.

The expectation of higher interest rates drove down the domestic currency though during the last ten minutes substantial selling of dollars perhaps on directions of RBI supported the rupee, said an analyst.

Meanwhile, the six-month forward closed at 2.40 per cent (2.35 per cent) while the twelve-month forward closed at 2.06 per cent (2.00 per cent).