Mumbai, Jul 9 : The rupee snapped two days of losses and bounced back by 47 paise to close at 60.14 against the dollar after the RBI and Sebi took steps to curb speculative trade in currency derivatives.
The rupee commenced at 59.70 a dollar from the previous close of 60.61 on the Interbank Foreign Exchange market and improved to a high of 59.60 on fresh dollar selling by exporters and the steps taken by the regulators.
It then fell to the day's low of 60.48 before recovering to settle at 60.14, a rise of 47 paise or 0.78 per cent. Yesterday, rupee dived to all-time low of 61.21 but partially recovered on RBI intervention.
After the markets closed, RBI asked oil firms to buy dollars from a single bank to curb bunched up demand. IOC, HPCL and BPCL are the biggest buyers of dollars in domestic market with USD 8-8.5 billion of monthly purchases. “The rupee got strong support from the latest moves taken by the central bank and SEBI,” said Abhishek Goenka, Founder and CEO, India Forex Advisors. “Tomorrow's FOMC minutes and Bernanke speech will be very important for the rupee and for the US dollar.”
The Securities and Exchange Board of India (Sebi), in consultation with the Reserve Bank of India, last night tightened exposure norms for currency derivatives to check large-scale speculation. It cut the exposure that brokers and their clients can take on currency derivatives and also doubled their margins on dollar-rupee contracts.
The RBI also imposed curbs on banks with regard to trading in currency futures and options with immediate effect. Under the new norms, banks have been barred from trading in currency futures and exchange-traded currency options market on their own. They will be allowed to trade on behalf of clients.
Keen to boost manufacturing and exports, government today decided to enhance steel production capacity to 300 million tonnes and raise textile exports by 30 per cent this year.
A meeting chaired by Prime Minister Manmohan Singh also decided to give a push towards creating domestic manufacturing capabilities in advanced materials, alloys and composites, sources said.