Mumbai, Dec. 20: Large dollar remittances by exporters today saw the rupee breaching the psychological barrier of 48 for the first time in this calendar year even as it closed at yet another high of 48.00/01 against the dollar. Even intervention by the Reserve Bank failed to dent the optimism, as exporters continued to offload dollars fearing another fall in the greenback.
The rupee has maintained a steady rise in recent times following export proceeds, rising NRI remittances and sagging value of the dollar vis-à-vis other currencies. The currency appreciated by a whopping 17 paise this week, regularly scaling new heights. It has gained over 2 per cent so far from a record low of 49.08 per dollar in May this year.
Some analysts feel the rupee is undervalued by over 2 per cent against the US currency if one were to consider the greenback’s sharp fall against other currencies. “The appreciation should continue and the rupee is likely to settle at around 47.80-85 levels in due course,” a dealer averred.
Despite the plunging greenback, it was a volatile day for the currency, which opened firm at 48.05/06 per dollar—over 7 paise higher from its previous finish—and rose to the day’s high of 47.9750. However, dollar demand from nationalised banks towards the fag end of the session trimmed some of its gains and the currency closed at 48.00/01.
The bullishness did not leave the government securities market untouched, with yields touching life-time lows. Yield on the benchmark 10-year, 7.40 per cent security ended at a new low of 6.3086 per cent, from a record intra-day low of 6.3045 per cent.