Finance Minister P. Chidambaram tried to soothe market fears over the rupee, even as the currency lost strength for the fourth consecutive day, sliding 77 paise to close at 63.24 against the US dollar on Monday.
“The rupee will settle down,” the Minister asserted.
Intervention by the RBI, and some encouraging numbers on the trade front — exports grew for the fourth month in a row, though the trade deficit widened — saw the rupee come off its intra-day low of Rs 63.44/dollar, the lowest in nearly two months. The domestic currency has lost 162 paise against the dollar in just four trading sessions. Dealers said the rupee was weakening as dollar buying by the oil marketing companies had partially shifted to the market. Economic Affairs Secretary Arvind Mayaram had said last week that oil PSUs were buying almost 40 per cent of their dollars from the open market.
At the same time, heavy sell-offs in the equity market, which has been falling after hitting a life-time high on Diwali day, also put pressure on the rupee.
The benchmark equity index, BSE Sensex, shed over 175 points on Monday.
shishir.s@thehindu.co.in