May 04, 2012 08:04 AM IST | Source: CNBC-TV18

Rupee may open weak tomorrow

The RBI is coming in at all levels, but the rupees weakness inherent in the situation. Oil companies are buying lots of dollar -- India's biggest import. CNBC-TV18's Latha Venkatesh reports.

The RBI is coming in at all levels, but the rupees weakness inherent in the situation. Oil companies are buying lots of dollar -- India's biggest import. CNBC-TV18's Latha Venkatesh reports. 

Whenever, the rupee tends to show greater weakness, the oil companies come and buy with greater vehemence which takes the rupee further down. The rupee is falling under the weight of our own huge trade deficit. The current account deficit (CAD) is not much of a help, CAD should be about USD 85 billion for the year ended, and it is unlikely to be different for the current year.

One need to have about USD 1-2 billion every week to bridge the gap, and that inevitably casts its pressure on the rupee. According to dealers, the Reserve Bank was there at all levels but the intervention was not strong enough to stem the fall but only smooth the volatility. With the rupee ending at the lowest close of 2012 and breaching the intraday lowest of 2012 there are chances of further weakness in rupee tomorrow when it opens for trade.

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