RBI likely sold dollars to stabilise rupee after rate hike

  • Reuters, Mumbai
  • |
  • Updated: Sep 20, 2013 15:44 IST

The Reserve Bank likely sold dollars via state-run banks to stabilise the rupee after it extended losses post the policy decision to raise the key interest rate by 25 basis points while also unwinding some of the recent rupee support steps.

Four dealers said the central bank was spotted selling the greenback from around 62.60 levels.

The partially convertible rupee was trading at 61.96/97 per dollar by 1:08pm (07:38am GMT), sharply below its session low of 62.61 but still weaker than its close of 61.77/78 on Thursday.

Reserve Bank of India governor Raghuram Rajan raised the central bank's policy repo rate by 25 basis points (bps) to 7.50 percent, defying widespread forecasts that he would leave the rate on hold to bolster a sluggish economy, and as expected struck a hawkish tone.

 

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