SENSEX NIFTY
Apr 10, 2012, 08.38 AM IST | Source: Reuters

Rupee ends off lows on likely RBI intervention

The rupee fell on Monday as weak labour market numbers from United States last week fueled slowdown worries and prompted investors to cut risk, but likely dollar sales by the Reserve Bank of India helped the local unit cut some losses.

Rupee ends off lows on likely RBI intervention

The rupee fell on Monday as weak labour market numbers from United States last week fueled slowdown worries and prompted investors to cut risk, but likely dollar sales by the Reserve Bank of India helped the local unit cut some losses.

The RBI likely sold dollars around 51.33 to 51.36 rupee levels in late trades, four traders said.

The rupee ended at 51.14/15 to the dollar, weaker than Wednesday's close of 51.055/065, but off the day's low of 51.41.

Trading in the Indian currency market was closed on Thursday and Friday for religious holidays.

The RBI has been intervening in the foreign exchange market for the last few months, primarily to check the rupee's fall.

The central bank bought USD 1.1 billion and sold USD 1.4 billion in the spot market in February, data released on Monday showed.

"Rupee was weighed down by the negative sentiment with equities falling all over the world," said Naveen Raghuvanshi, associate vice-president of foreign currency trading at Development Credit Bank .

Asian shares fell on Monday as a sharp slowdown in US jobs growth raised concerns about the strength of the world's largest economy, prompting investors to curb risk exposure ahead of more US data and earnings as well as figures from China this week.

"But a clear direction for the rupee should emerge only after the (central bank) policy is announced next week. Till then rupee should be supported around 51.50 with a resistance around 51.00."

The Reserve Bank of India will release its policy statement for 2012/13 on April 17, where many traders expect liquidity boosting measures, while some believe an interest rate cut may be seen support the economy inspite of the still high inflation.

Friday's data showed U.S. payrolls grew by 120,000 in March, far below the expected gain of 203,000 jobs for the smallest rise since October, keeping the door open for the Federal Reserve to provide more monetary support to the fragile economy.

The one-month offshore non-deliverable forward contracts were at 51.62.

In the currency futures market, the most-traded near-month dollar-rupee contracts on the National Stock Exchange, the MCX-SX and on the United Stock Exchange all ended around 51.4, on a total volume of USD 3.1 billion.

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