Rajan still rocks: How RBI swung into action to save the rupee

MUMBAI: The Reserve Bank of India has intervened heavily to check the rupee's free fall against the dollar today early morning trades as some public sector banks were seen selling dollars, dealers said.

At 11.05 hours the rupee traded at 67.36 per dollar versus 67.07 closed last Friday.

"The currency market was turbulent in the morning trades," said K N Dey, executive director at Mecklai Financial. "But, the central bank has efficiently dealt with it curbing the sudden volatility."

"This shows, Raghuram Rajan is still at the driver's seat," he said.

The local unit lost nearly 1% to the dollar as it hit intra-day low at 67.69 mirroring weakness in the offshore non-deliverable forwards markets.

The rupee hit as low as 67.70 in the Singapore market, which is ahead of India's market hours.

Some speculators were seen short selling the rupee in the offshore market, which sent the local unit tumbling in the wake of fresh uncertainties, exacerbated by Rajan's exit, said two dealers.

Although the exchange rate now looks relatively stable, but dealers fear that fresh bout of volatility would hit when the European markets open around 1.30pm local time.

"We may see another round of RBI intervention by then," said another dealer from a private bank.