Rupee recovers on SEBI, RBI action
After falling to all-time intra day low of 61.21 on Monday, the rupee on Tuesday staged some recovery by closing to 60.15 against previous close of 60.62, showing a gain of 47 paise after the regulators – SEBI and RBI – announced measures to curb volatility.business Updated: Jul 09, 2013 21:16 IST
After falling to all-time intra day low of 61.21 on Monday, the rupee on Tuesday staged some recovery by closing to 60.15 against previous close of 60.62, showing a gain of 47 paise after the regulators-the Securities and Exchange Board of India (SEBI) and the Reserve Bank of India (RBI)- announced measures to curb volatility.
The central bank also asked oil firms to buy dollars from a single bank to curb bunched up demand. IOC, HPCL and BPCL are the biggest buyers of dollars in domestic market with $8-8.5 billion of monthly purchases.
“We have been asked to buy dollars from a single bank. This order is for all IOC, HPCL and BPCL,” said a source at one of the three companies.
Late on Monday, SEBI doubled the margin requirement on the domestic dollar-rupee forward trade making it costlier for traders to bet on the rupee’s future value while the RBI barred banks from trading in currency futures and exchange traded currency options market on their own. They will, however, be allowed to trade on behalf of their clients.
“Increase in margins in the currency futures segment and disallowing banks to trade in the futures and options category would help curb volatility in the Rupee,” said Naveen Mathur, associate director, commodities and currencies, Angel Commodity Broking. “Measures to curtail volatility in the Rupee are expected to lead to appreciation in the currency,” he said.
The rupee commenced at 59.70 a dollar from the previous close of 60.61 on and improved to a high of 59.60 on fresh dollar selling by exporters and the steps taken by the regulators. It then fell to the day’s low of 60.48 before recovering to settle at 60.14, a rise of 0.78%.