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Wednesday, June 29, 2022

Rupee falls 19 paise against Dollar on Raghuram Rajan tenure issue

Increased buying by funds and investors driven by encouraging GDP numbers and crore infrastructure sector growth moves the Sensex up by 62 points.

By: ENS Economic Bureau | Mumbai |
June 2, 2016 1:50:41 am
BSE Sensex, GDP Growth, market, BSE Sensex scaled another peak of 26,730.15  as country’s economy has gained momentum.

The rupee on Wednesday fell by 19 paise to 67.45 against the US currency after a section of the media reported that RBI Governor Raghuram Rajan doesn’t want an extension of his term, though Prime Minister Narendra Modi wants him to continue as the Governor. However, government sources termed these reports as “speculative”.

Reuters reported that the government would re-appoint the Governor, if he wished to stay on, citing government officials. Rajan had previously declined to say whether he would accept such a re-appointment saying it would be speculative to discuss. Kolkata-based newspaper Ananadabazar Patrika reported that Rajan did not want to remain at the central bank, also citing unidentified sources.

“Market sources are saying that vested interests and cronies who have been forced to pay back their loans by banks are instigating all this against Rajan,” the Press Trust of India quoted Mohandas Pai, the former Chief Financial Officer, HR Head and Board member of Infosys, as saying.

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Last week, BJP’s Rajya Sabha MP Subramanian Swamy wrote again to Prime Minister Narendra Modi levelling fresh allegations of “leaking” sensitive and confidential financial information to the world. Swamy, who had written to the PM on May 17 seeking Rajan’s removal from the post, this time listed six charges against him. He wrote, “Despite being a government official, Rajan has been publicly disparaging of the BJP government. For example, he has by innuendos in effect held our government responsible for the ‘climate of intolerance’ in the country.”

Earlier in the day, the domestic currency had opened a tad higher at 67.24 from Tuesday’s closing level of 67.26 and touched a fresh intra-day high of 67.1125 following a sharp rebound in local equities and encouraging macroeconomic indicators. However, rupee took a sudden reversal in mid-afternoon trade following heavy dollar demand and plunged to hit a fresh intra-day low of 67.4625 before closing at 67.45, showing a fall of 19 paise, or 0.28 per cent.The rupee has lost 42 paise in the last three days.

Meanwhile, the benchmark BSE Sensex on Wednesday staged a recovery by rising nearly 46 points to close at 26,713.93 on emergence of buying in telecom, FMCG, IT, Teck and realty sectors, driven by robust macro-economic data despite a resistance from global headwinds, according to a PTI report.

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