The domestic currency touched a near four-year high
with the deluge of dollar supply to close at 43.60/65
in its value against the dollar. The currency gained
46 paise from its previous close.
Deals were struck after official market closing which
pushed up the currency further at the 43.50 level.
rupee touched a high of 43.33 in the course of the day,
a movement of over 70 paise intra-day.
a senior Government official today stated that the appreciation
of the rupee would be temporary. According to analysts,
RBI may be lacking the adequate instruments to take
control of the heavy dollar supply currently being witnessed
in the market and effectively stem the rise of the domestic
currency. This stance of the regulator might however
change as the new fiscal commences and the central bank
floats the market stabilisation bonds.
These stabilisation bonds will help curb the rupee liquidity
that gets enhanced each time the central bank buys dollars
in the foreign exchange market.