MUMBAI, May 7: The Reserve Bank of India (RBI) on Wednesday continued its intervention in the forex market to keep the dollar above Rs 35.80 and also to inject liquidity in the domestic money market. The Reserve Bank of India (RBI) purchased dollars for the third successive day.

Dealers estimated the dollar-buying to be around $100-150 million. The interventions pushed down the rupee which opened higher at 35.84-35.85 to 35.88. The rupee closed at 35.86-35.87 a dollar, higher from the previous day's closing levels of around 35.83.

The reserve Bank's intervention on Wednesday was supported by State Bank of India, which also began buying dollars.

It is not known whether State Bank bought on behalf of its clients or at the Reserve Bank s behest, dealers said. But forex dealers panicked in a market that was dominated by two major players.

Importers were quiet and not much buying was reported. State Bank, however, began selling dollars toward close. The selling was on behalf of its clients, a dealer at a private-owned bank said.

This led to the rupee gaining slightly and the dollar softened marginally. The rupee is seen weakening on Friday if the Reserve Bank continues its dollar buying, dealers said.

Copyright © 1997 Indian Express Newspapers (Bombay) Ltd.