Rupee plunges to all-time low of Rs 45.01

Rupee plunges to all-time low of Rs 45.01
PRESS TRUST OF INDIA

MUMBAI, JULY 21: The rupee plunged against the US currency on heavy all-round dollar demand to close at all-time record lows of Rs 45.01/03 in volatile trade at the interbank foreign exchange (forex) market here on Friday. Opening around Rs 44.90/92 per dollar, the rupee nose-dived to intraday lows of Rs 45.07/09 on persistent heavy demand from both state-run and foreign banks in the absence of dollar-selling intervention by the central bank in support of the Indian unit.

But, the rupee later recovered marginal ground on light profit-dollar sales and after the State Bank of India (SBI) lowered its dollar-offer quotes, dealers said.

Meanwhile, the Reserve Bank of India (RBI) announced a series of measures to arrest the rupee slide after the forex market closed for trading.

The apex bank raised the bank rate by one percentage point to eight per cent and increased the cash reserve ratio (CRR) by 0.5 per cent.

The increase in CRR to 8.5 per cent in two stages and revision of the bank rate are part of the liquidity tightening measures initiated by the RBI to curb excessive speculation after the rupee today crossed the Rs 45 barrier against the US dollar and dipped to new lows.

The increase in the bank rate is effective after today's close of business while the CRR increase is effective from the fortnights begining July 29 and August 12.

The rupee reacted favourably to the liquidity tightening measures of the central bank and rallied smartly to be quoted at Rs 44.65/85 to the dollar in unofficial deals after trading hours.