Lots and lots of money changes hands every day in foreign exchange trading.
RBI steps up interventions to prevent rupee gains.
If Sebi and RBI remain quiet about this brazenly illegal activity, will someone in the finance ministry or the NITI Aayog take a closer look, asks Debashis Basu.
Forex trade can be a very profitable venture. But while the money market movements are small, they can hurt big.
Since the introduction of exchange traded forex futures contract in 1972 at the Chicago Mercantile Exchange, the ever increasing transaction volume and participation has established the popularity of Forex in the world.
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Sentiments turned buoyant after RBI on Monday cut the marginal standing facility rate, at which it lends emergency funds to banks, by 0.5 per cent to 9 per cent with an aim to improve liquidity and boost economic activities.
Royal Bank of Scotland and JP Morgan were also fined over attempts to rig currency benchmarks in a year-long probe that has put the largely unregulated $5 trillion-a-day market on a tighter leash, with dozens of dealers suspended or fired.
The RBI cracked down on offshore foreign exchange trading by Indians through online trading websites.
The partially convertible rupee closed at 62.16/17 per dollar compared to 61.79/80 on Tuesday. Financial markets were closed on Wednesday for Christmas.
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Domestic shares jumped nearly 1.5 per cent on Monday to an all-time high, surpassing their previous record hit just last week, as lenders including ICICI Bank extended a recent rally.
The rupee appreciated by three paise to close at one-week high of 60.81 against the US dollar in the previous session on sustained dollar selling by exporters and capital inflows.
Forex dealers said though increased demand for the US currency from importers put pressure on the rupee but a higher opening in the domestic equity market and the dollar's rise against other currencies overseas, capped the losses.
Anandabazar Patrika reported that Rajan would prefer to go back to the United States after his three-year term expires in early September
Most dealers said the heavy buying by state-run banks was on behalf of the central bank, looking to limit the volatility in the rupee, in the face of foreign fund flows into the share market.
Traders are looking ahead at the consumer prices data due on Wednesday, amid rising expectation the Reserve Bank of India could opt for earlier-than-expected cuts in interest rates should inflation continue to ease.
The partially convertible rupee closed at 61.45/46 per dollar, weaker from Wednesday's 61.35/36.
Domestic shares and other global markets rose on upbeat trade data from China earlier in the day and after a US House deal extending the federal borrowing authority.
On Monday, the rupee recovered from four-month low by rising 25 paise in its biggest gain in three weeks to end at 60.93 against the Greenback as shares soared ahead of the RBI's bi-monthly policy meet and exporters offloaded dollars.
Investors turn cautious ahead of upcoming budget
The rupee resumed higher at 59.69 per dollar as against the last closing level of 59.73 at the Interbank Foreign Exchange market.
The rupee resumed higher at 60.13 per dollar as against the last closing level of 60.20 at the Interbank Foreign Exchange market, and hovered in a range of 60.07 and 60.18 per dollar before quoting at 60.08 at 1000 hours.
Central bank steps up dollar purchases to check rupee gains
In New York Market, the US dollar rose against the Australian dollar on Tuesday as gold futures dropped more than two per cent and investors anticipated Chinese data that is likely to show a slowing of growth.
The US and European Union on Monday announced a round of sanctions against Russian officials.
In New York, the US dollar swung higher against many of its rivals on Wednesday.
In New York, the dollar fell against the British pound on Wednesday after the Bank of England raised its projections for UK growth in 2014. However, analysts warned that gains against the dollar could be limited.
The partially convertible rupee closed at 61.5350/5450 per dollar compared to 61.54/55 on Wednesday.
The rupee had gained five paise to close at 63.25 against the dollar in on Monday's trade on fresh selling of the US currency by exporters amid bullish stocks.
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The rupee resumed slightly lower at 62.05 per dollar as against the last weekend's level of 62.04 at the Interbank Foreign Exchange market. It recovered to 61.88 per dollar before quoting 61.93 at 1045 hours.
The partially convertible rupee closed at 61.2350/2450 per dollar compared with 61.31/32 on Tuesday.
Forex dealers attributed the rupee's fall to increased demand for the US currency from importers and a lower opening in the domestic equity market.
Forex dealers said besides increased selling of the American currency by exporters and banks, the dollar's weakness against other currencies overseas also supported the rupee, but a lower opening in the domestic equity market limited the rise.
Traders say the rupee and other global currencies will likely track the continued uncertainty in the US budget stalemate and government shutdown.
Forex dealers said besides increased selling of the American currency by exporters and banks, a higher opening in the domestic equity market and the dollar's weakness against other currencies overseas supported the rupee.
Forex dealers said besides the dollar's gains against other currencies overseas, increased demand from importers for the American unit put pressure on the rupee but a higher opening in the domestic equity market capped losses.
Traders also say oil-related dollar demand is capping broader gains in the rupee.
In New York, the US currency fell against the Australian dollar and British pound on Monday as investors continued to weigh the potential weather drag on recent economic data, and whether or not it could sway monetary policy.
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The rupee has avoided the heavy losses suffered by some emerging Asian currencies such as the Philippine peso this year because of its efforts to narrow the current account deficit, and strong foreign investor inflows.
Traders are now focussed on the upcoming November trade data, due sometime this week, for near-term direction, with consumer inflation data due out on Thursday, which will help set expectations ahead of the Reserve Bank of India's policy review on December 18.
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