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Rupee continues Declining Trend despite RBI Measures

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TNI Bureau: Despite the Reserve Bank of India’s attempt to curb rupee’s slide, the domestic currency fell to 57.01 against the US dollar following the announcement of the measures on Monday.

Earlier on Monday, the local currency rose by 77 paise to 56.44 against US dollar after the government said it would announce steps to check the rupee’s slide. Later it touched 57-mark against US dollar despite the central bank hiked External Commercial Borrowing (ECB) limit by $10 billion and foreign institutional investors (FIIs) limit in government bonds to $20 billion.

The RBI measures disappointed the markets and investors as the Sensex was down about 90 points at the end of the session on Monday. The 30-share BSE Sensex, that had gained more than 100 points in the morning to trade above 17,000, fell 90.35 points at 16,882.16. Similarly, the broad-based NSE Nifty was down 31.4 points at 5,114.65.

SBI was down by 1.94 per cent at Rs 2,114.90, and HDFC Bank lost 1.27 per cent to Rs 537.25. Kotak Mahindra Bank was down 1.82 per cent at Rs 573.15 and PNB slipped to Rs 775.90, down 0.53 per cent.

The market, which had gained a little before the announcements, declined suddenly, which was not expected. Though the bonds were announced to attract foreign investments that would increase the rupee, it lost ground on Monday. The rupee, which had breached the 57-mark on June 22, opened with a positive sign against US dollar today. However, it sharply fell to 57.01 soon after the RBI measures were announced.

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