Mumbai, June 21: The rupee hit a record low today at 56.57 against the dollar on the back of a rising month-end demand for the greenback from oil importers amid a fall in global crude prices.
The currency later recovered to end 15 paise down at 56.31 on the intervention of the Reserve Bank of India and a buzz that the central bank could introduce some capital controls.
The rupee had been under pressure in the last couple of trading sessions and has fallen 90 paise, or 1.62 per cent, in four consecutive days amid worries over the country’s economic health.
Analysts said though there continued to be a heavy demand for the dollar from oil importers, the greenback was also being sought to meet FCCB (foreign currency convertible bonds) repayment obligations of domestic corporate houses.
There was also no support for the rupee from FIIs who sold stocks worth Rs 257 crore today.
Some global factors also played their part: lesser than expected aggressive measures by the US Federal Reserve, weak economic Chinese data and a fall in the dollar’s main rival euro ahead of an audit of Spanish banks, helped the American currency to rise and the sentiment was against the rupee from the outset.
At the inter-bank foreign exchange (forex) market, the domestic unit resumed weak at 56.35 a dollar against the last close of 56.15. Month-end dollar demand from importers, mainly oil refiners, to meet their requirements, put more pressure on the currency and it hit a record low 56.57 intra-day. The rupee hit 56.52 on May 31.
However, possible intervention by the Reserve Bank and a late rally in Indian stocks coupled with talks of the central bank imposing monetary controls helped the rupee to close at 56.31, down 0.27 per cent. This closing value is also the weakest for the currency, lower than the 56.23 hit on May 30.