Rupee Falls to 95.59 as RBI Limits Swap Facility
The Indian rupee depreciated by 17 paise to 95.59 against the US dollar in early trade on Monday, as investors' sentiment turned cautious.
According to Forex traders, the Reserve Bank of India's (RBI) decision to limit its swap facility for FCNR (B) deposits only until August 31 has contributed to the rupee's weakness.
The RBI had earlier introduced a concessional swap facility to encourage foreign currency inflows, which attracted USD 56.84 billion till August 13.
However, analysts believe that this support will eventually wear off, and the market will begin looking beyond the temporary cushion provided by these inflows.
Amit Pabari, MD of CR Forex Advisors, said that technically, the 95.20-95.30 zone is likely to act as an important support area for the rupee.