RBI measures prop up Rupee, closes up 42 paise

Treasury managers in banks said there was also suspected intervention by RBI in the forex market. However, the domestic unit lost some of the gains and finally settled at 53.42, up by 42 paise over the previous close. "Initially, there seemed to be some kind of intervention from RBI, which we heard from the market. After that the notification regarding the Exchange Earners` Foreign Currency Account (EEFC) came, which lifted the currency," T S Srinivasan, GM (Treasury) of Indian Overseas Bank, said. Talking about near-term outlook, he said that 54 level would act as strong resistance level going ahead.

In order to arrest the declining value of the rupee, RBI today asked exporters to sell 50 per cent of their retained foreign exchange earning. The central bank has also fixed limit for intra-day trading of foreign currency by banks. P Rajaram Karanth, GM (Treasury) of Corporation Bank said, "There was some kind of intervention from RBI in the morning .. EEFC circular helped in arresting the weakness in the domestic currency," he said.