Snapping a six-session losing streak, the rupee on Friday rose by 25 paise to 64.30 in early trade on fresh selling of the U.S. dollar by exporters, after Finance Minister P. Chidambaram sought to assuage investors asserting there is no need for “excessive and unwarranted pessimism.”
Also, weakening of the dollar against some currencies overseas and RBI Governor D. Subbarao assuring that the central bank has adequate foreign exchange reserves to deal with the declining value of rupee also boosted the currency, Forex dealers said.
The local currency had lost 44 paise to close at a new low low of 64.55 against dollar, after breaching the 65 mark to mark all-time intra-day low of 65.56 in Thursday’s trade at the Interbank Foreign Exchange market.
Finance Minister P. Chidambaram on Thursday said rupee is undervalued and has overshot appropriate levels but sought to assuage investors asserting there is no need for “excessive and unwarranted pessimism.”
The Finance Minister met Mr. Subbarao and his advisor Raghuram Rajan to take stock of the situation.
“I believe our Forex reserves are adequate to manage current situation,” Mr. Subbarao said on Thursday in response to whether RBI has enough firepower to defend the rupee, which plunged to an all-time low of 65.56 on Friday.
Meanwhile, the BSE benchmark Sensex fell 61.96 points, or 0.34 per cent, to 18,250.98 in early trade on Friday.
Source:- thehindu.com
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