Rupee vs Dollar : Rupee has been witnessing weakness against the dollar for the last few trading sessions. Now the Reserve Bank (RBI) is taking steps to support its currency. According to news agency Reuters, RBI is selling US dollars to reduce pressure on the rupee. It is being estimated that there will be no major fall in the rupee in the near term. It is being estimated that there will be no major fall in the rupee in the near term.
Some effect of this is also visible on the rupee. In Friday’s trading session, the rupee opened at 83.48 against the dollar, while in the previous trading session it had closed at 83.50. This means that there was no significant change compared to the previous trading session and it opened at almost the same level.
Why did the rupee come under pressure?
There has been continuous selling in the Indian stock market for some time now. Foreign investors are pulling out money due to concerns like low voting. However, the emphasis of domestic institutional investors remains on buying. Nevertheless, equity market volatility has increased significantly. At the same time, the demand for dollars from local importers is also increasing rapidly.
Due to all this there was a lot of pressure on the rupee and this was happening continuously. This is the reason why the Reserve Bank had to take precautionary measures like selling dollars. “The RBI is probably selling the dollar near the 83.50 level through state-owned banks,” Reuters quoted a foreign exchange trader at a private bank as saying. “Given the aggressive manner in which the central bank is defending the rupee, it does not seem that there is going to be any major decline in the rupee in the near term.”
