The rupee gave up gains to end a volatile session near a three-month low on Friday, after the stock market snapped a three-day record-setting rally and the euro fell against dollar, dealers said.
Heavy central bank intervention to rein in the overvalued rupee saw India's foreign exchange reserves jump more than $8 billion last month to a record $151.62 billion on March 31, central bank data showed.
The rupee, which analysts say is overvalued by 7.6 percent on a trade-weighted basis, ended at 44.6850/6950 per dollar, marginally firmer than the previous session's 44.7050/71.
In early trade it matched 44.7425 hit last week, its lowest since January 6 before rebounding to hit a intra-day high of 44.61. Volumes in India's $16-billion-a-day foreign exchange market were on the low side as traders from the State Bank of India stayed away from work demanding an increase in their pension.
Government-run State Bank, which has more than 200,000 staff at some 9,000 branches across the country, is the biggest player in India's foreign exchange and bond markets. The nation-wide strike began on Monday.
"We saw some decent dollar demand from the state-run banks and it could be on behalf of the central bank and for their corporate clients," said a senior trader at a foreign bank.
"The stock market drop impacted sentiment quite a bit, leading to a fall in the rupee also."
Comments
Comments are closed.