The rupee closed at Rs. 131.70/32.20 against the dollar from an opening position of Rs 131.80. "There was nothing unusual about the volumes, it was the usual.
Central Bank imposed limits on overnight bank positions were causing the volatility that has characterised the foreign exchange market in recent times, dealers said. Even small changes in demand and supply created high volatility.
Treasury Secretary Dr. P. B. Jayasundera has said the rupee’s recent depreciation trend was caused by speculators and the government was ready to intervene if and when necessary.
However, external sector data for March and April have shown a marked improvement and the market is optimistic for once.
The Central Bank, which forecasts the rupee to settle at Rs. 125 against the dollar, has said the depreciation of the currency would curb imports and build export competitiveness, using an argument it has consistently refused to acknowledge during the past five years or so.