With rupee breaching 74, RBI offers $ for desi currency

With rupee breaching 74, RBI offers $ for desi currency

Mumbai: The Reserve Bank of India (RBI) said that it has enough forex reserves and would supply banks dollars for six months through sell-buy swaps to ensure supply at a time of turmoil in global markets. The announcement came as the rupee hit a lifetime low of 74.48 in intra-day trades in the interbank market, in line with the rout in equity markets.

With state-owned banks selling dollars, the rupee recovered to close at 74.22, which was 58 paise lower than Wednesday. One positive news was the improvement in the country’s current account deficit (CAD), which narrowed sharply to $1.4 billion, or 0.2% of the GDP, for the December 2019 quarter as against 2.7% a year ago and 0.9% in the preceding quarter. However, with equity markets suffering their worst loss over fears of the coronavirus pandemic triggering a recession, overall sentiment was negative.