Mumbai: The rupee rose by 60 paise to 46.28 against the US dollar in early trading today, paring yesterday's record loss of 90 paise on expectations that the Reserve Bank may intervene to stem the rupee fall.
The rupee resumed stronger at 46.38/40 a dollar from Tuesday's close of 46.89/90 a dollar, aided by a recovery in stock prices in other Asian exchanges and the RBI moves to augment dollar supply.
The RBI yesterday asked public sector banks to raise dollar deposit rates for non-resident Indians and said it would continue to sell dollars as the rupee continued to slide.
RBI also decided to allow banks to borrow more by relaxing the statutory liquidity ratio (SLR) to ease the liquidity crunch and bolster the sliding currency. The central bank also expanded the liquidity adjustment facility scheme.Foreign banks are also reported to have sold dollars in the forex market after the RBI's steps to cool the financial markets.
The rupee had lost Rs2.29, or 5.13 per cent, in the last six days alone amidst heavy capital outflows and heavy dollar demand.
Foreign funds have so far sold a net $8.4 billion worth of stocks, driving the rupee down more than 15 per cent so far in 2008.
The dollar's strength against other currencies also seems to have impacted the rupee value.
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