Reserve Bank of India (RBI) Deputy Governor K C Chakrabarty on June 01 stated that the Indian unit’s decline was a result of realty matters and financial sector steps could only assist for the short term.

Mr. Chakrabarty stated that the Indian rupee was feeble owing to fundamental factors and the worldwide situation.

On the sidelines of an event here on Friday, he stated, “If it is weak due to fundamental factors and the global situation, we will not be able to arrest it.”

Mr. Chakrabarty added that the problem of trade shortfalls required to be tackled.

On questioned whether RBI would open a special dollar window for oil marketing firms, he stated that such a step would not be made public.

On June 01, the Indian unit made profit for a second successive session as exporters and firms sold US currency to make the most of the current rate of exchange.

Sandeep Gonsalves, forex consultant at Mecklai & Mecklai stated, “Psychologically, this is a good level for exporters to get their dollars converted.”

Indian rupee ended at 55.59 versus the US dollar, 0.9% up as compared to Thursday’s closing.

Market players stated the Reserve Bank of India intervention at 56.15 per dollar also aided the Indian currency rally by around 50p in intra-day trade.

But, dollar purchasing by OMCs and foreign fund outflows restrained the gains.

In a note, India Forex Advisors stated, “With no improvement in local and international issues, the local market and currency continue to feel the pinch. The US treasury yield has also made a record low of 1.56 per cent. The declining bond yield reflects the risk-aversion sentiment and extreme nervousness across global markets.”

The euro carried on suffering on financial and political fears as it dropped further to 1.2336 from 1.2365 a day before. The US currency index against six key currencies stood up at 83.32 against 83.04 yesterday.