MUMBAI: The Rupee sank against the dollar to touch yet another historic low at38.05, last week. The domestic Currency opened against the dollar at Rs 36.79/82, beginning its downhill Journey within span of minutes. It halted momentarily as it was on the verge of crossing the Rs 37 barrier, when the Reserve Bank of India sold small amount of dollars to various banks. However, the Rs 37 level was soon breached, and it thereafter zipped to crossRs38 level well before the loss.
The Rs 38.05 low was touched between 11:30pm when the screens came up with a bid offer price of Rs 38.05/20 before the currency sprung back to Rs 37.80, The RBI governor, Dr. C. Rangarajan, issued ‘a late evening statement to calm a highly jumpy for ex market. His main contention ‘was that the developments in the for ex market were at variance with the fundamentals. “The balance of payments position continues to remain good, underpinned by robust growth in exports,” he pointed out.
The statement goes on to add that exports till end December 1995 had risen 24.17% in dollar terms. Imports had grown 29.27% during the same period. The December trade deficit was at a mere $199.82 million against $516.35 million in November.
Article extracted from this publication >> February 7, 1996
