Rupee Rebounds as Central Bank Supports Currency, But Falls Again

The Indian rupee rebounded today after seven sessions of decline on the speculation that the central bank will intervene to stem the currency’s losses, but resumed its drop later.

Reserve Bank of India Governor Duvvuri Subbarao said that the bank “can and will intervene” in the proper time to reduce impact of the currency markets volatility on the economy. The Reserve Bank removed the $100 million net foreign-exchange ceiling on the currency swaps in an attempt to increase supply of dollars in the financial system. Some experts say that today’s rally of the rupee followed the sale of dollars by some state-run banks.

USD/INR rose from 52.4905 to 52.4950 as of 12:54 GMT today, while the daily minimum was 51.7600.

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