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Mumbai, Sept. 17

After witnessing a sharp fall for the last two days, the rupee rebounded against the dollar on Wednesday. The domestic currency appreciated by 55 paise against the greenback after the Reserve Bank of India intervened to check its fall. The rupee’s movement was in the range of 45 paise indicating high volatility, said dealers. The rupee opened stronger at 46.35/36, but weakened to touch an intra-day low of 46.72. It recovered to close at 46.34/35, against the previous close of 46.90. The domestic currency opened higher on the RBI statement that it will sell dollars in the domestic foreign exchange market to meet any demand-supply gaps, said a dealer with a private bank. However, strong dollar demand from banks to take advantage of NDF arbitrage pushed the rupee to its day’s low. The RBI sold dollars at these levels triggering off a domino effect, which led to rupee recovering its losses, added the dealer. In the forward market, the 6-month premium closed higher at 1.34 per cent (1.03) and the 12-month ended at 1.18 per cent (0.92).

— Our Bureau

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