The rupee breached the 61 to the dollar mark on Monday amid a weak equity market and heavy dollar demand from banks and importers.

The currency unit hit an all-time intra-day low of 61.19 against the dollar. However, it recovered to close at 60.61 a dollar after intervention by the Reserve Bank of India.

The unit opened 65 paise lower at 60.87 against Friday’s close of 60.22 a dollar. It dipped further as the American unit strengthened against other currencies.

The BSE-benchmark Sensex also closed lower by 171 points (0.88 per cent) at 19,325 points.

“The US jobs data and weakness in the domestic equity market weighed on the rupee,” said a treasury official with a public sector bank.

“The Reserve Bank of India intervened at the intra-day low level and this helped the rupee recover. We see the rupee appreciating from here to reach around 59 levels in a month,” the official said.

However, Hariprasad M.P., Head-Treasury, CentrumDirect, said, “The rupee is still under pressure due to fuel inflation and current account deficit fears. Inaction from the Government’s side is adding to the rupee woes.”

“It could further drop to 62 once the rupee crosses the 61.50 mark,” he added.

The all-time closing low for the rupee was 60.76 against the dollar on June 26.

There were expectations in the market that the central bank will open a separate window to meet the demand for dollars from oil companies to pay for their imports.

(This article was published on July 8, 2013)
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