Rupee gains 3.4pc vs dollar in 11 days

Higher exchange rates attracted extensive dollar selling especially from exporters which enabled the rupee to recover Rs9.24 against the greenback during the last 11 days. The US currency peaked at an all-time high at Rs276.58 on Feb 3 against the rupee mainly due to extreme volatility in exchange rates stemming from the government’s attempt to manage the exchange parity artificially low which created a grey market providing speculators much space for manipulation and profiteering. However, the decapping of rates in the last week of January not only eased the exchange rate uncertainty but also improved dollar availability substantially both in interbank and open markets which strengthened the local currency. The rupee recovered 3.34pc or Rs9.24 after hitting a record low at Rs276.58. The State Bank on Tuesday reported that the dollar depreciated by Rs2.10 to close at Rs267.34 from Rs269.44. “The fall in dollar rates is due to higher inflows despite no encouraging reports from the International Monetary Fund,” said Atif Ahmed, an interbank currency dealer.