CB intervenes again to defend rupee

Thursday, 9 February 2012 02:40 - - {{hitsCtrl.values.hits}}

The Central Bank yesterday intervened yet again to defend the rupee as the country struggles with a balance of payments crisis.

Reuters said the rupee ended flat at 114.30 a dollar from Monday’s close as the bank defended it by selling more than $27 million, having allowed the currency to depreciate by 20 cents in each of the two previous sessions.

Through Wednesday, the central bank had spent $1.24 billion in 51 sessions since a 3 percent devaluation on Nov. 21 to curb a sharp rupee fall, despite the country facing a current account deficit and a balance-of-payments crisis.

Central Bank on Friday raised benchmark interest rates by 50 basis points, its first hike in five years, and it has allowed the rupee to depreciate by 40 cents since Thursday.