Rupee strengthens sharply against US dollar in early trade on Monday
The Indian rupee strengthened sharply against the US dollar in early trade on Monday after the Reserve Bank of India announced several measures to contain volatility in the currency exchange market. The RBI opened a special dollar window on October 12 to supply daily requirements for three state-owned oil companies. Simultaneously, its October 10 circulars tightened forex derivative rules by banning the rebooking of cancelled contracts, lowering the limit for unhedged transactions from $100 million to $5 million, and requiring banks to keep a 20% cash reserve on certain rupee-linked contracts exceeding $2 million (while still allowing maturity rollovers). Moreover, eased crude oil prices on expectations of a Russia-Ukraine energy ceasefire also supported rupee sentiments. Although, Foreign Institutional Investors offloaded equities worth Rs 3,568.90 crore on a net basis on Friday, exchange data showed. The RBI released on Friday showed India's forex reserves dropped by $12.952 billion to $734.606 billion during the week ended October 2. The overall reserves had dropped by $18.343 billion to $747.557 billion in the previous reporting week ended September 25.
The partially convertible currency is currently trading at 95.79, stronger by 92 paise from its previous close of 96.71 on Friday. The currency touched a high and low of 95.9675 and 95.57 respectively.
