Rupee drops 2.5 paise against US Dollar
Rupee had gained by ten paise in the earlier two sessions following robust FII inflows into the buoyant economy.india Updated: Mar 17, 2006 19:59 IST
The Rupee on Friday closed at Rs 44.45/46 per dollar, a 2.5 paise fall from Thursday's close of Rs 44.42/43 and a steep decline from early peaks of Rs 44.35/37 per dollar.
Late dollar demand from oil corporates and suspected central bank dollar buying intervention weakened the Rupee, preventing a possible sharp extended rally on the back of sustained FII inflows and a sliding dollar overseas.
Rupee had gained by ten paise in the earlier two sessions following robust FII inflows into the buoyant economy.
The Rupee underwent a downward correction after rising crude oil prices fuelled heavy dollar demand from oil corporates. Suspected dollar-buying intervention by the Reserve Bank of India (RBI) also arrested a sharp rally after the Rupee hit highs of 44.35/37 in early deals, dealers said.
Oil prices shot up to USD 63.50 a barrel in late Asian trade due to geo-political supply concerns.
State-run banks normally buy/sell dollars at the behest of the RBI to curb excessive volatility in the currency markets and to prevent sharp swings either-way.