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Rupee drops 10 paise

MUMBAI: The rupee fell sharply against the dollar by about 10 paise to 39.4450/4550 on Monday against 39.3600 last Friday, driven by fairly good dollar buying amidst suspected intervention by the central bank.

The rupee resumed steady but later turned weak and touched 39.4750 during the day even as the stock markets remained bullish.

Forex dealers said the rupee was trapped between portfolio inflows, following a sharp rally in the stock markets, and the prospect of the Reserve Bank intervention in favour of dollar. Traders said the bullish stock market is a positive sign for the rupee.

There was good amount of dollar purchases from foreign banks, forex dealers said. “The refunds from Reliance Power IPO offerings too seem to be causing pressure on the Indian unit,” they added.

Besides, fears of central bank intervention weighed on the rupee sentiment.

Meanwhile, the Reserve Bank fixed the reference rate for the U.S. currency at Rs. 39.38. — PTI

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