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29 Aug 2013
USD/INR down 3% from 69.00 record high
FXstreet.com (Barcelona) - On the back of an uncontrollable spike to fresh all time low just around 69.00 yesterday, the Indian Rupee has opened at a much higher price level vs the US Dollar today, trading around the 67.00 handle, which implies almost 3% in losses for USD/INR on the day. A more risk-balanced market coupled with RBI intervention has helped to stabilize the rate.
As the Times of India notes: "The Reserve Bank of India responded to the fall by announcing a move to provide dollars from its reserves to meet import needs of oil companies which account for nearly 40% of demand for dollars in a normal month."
The RBI's move to sell US dollars directly to public sector oil companies — IndianOil, HPCL and BPCL —, as the Times of India comments, "has resulted in the rupee firming up in the offshore forward market with dealers saying that the RBI appears to have waited for the rupee to get into an oversold position before coming out with its measures."
As the Times of India notes: "The Reserve Bank of India responded to the fall by announcing a move to provide dollars from its reserves to meet import needs of oil companies which account for nearly 40% of demand for dollars in a normal month."
The RBI's move to sell US dollars directly to public sector oil companies — IndianOil, HPCL and BPCL —, as the Times of India comments, "has resulted in the rupee firming up in the offshore forward market with dealers saying that the RBI appears to have waited for the rupee to get into an oversold position before coming out with its measures."