Dollar hits Rs.302 in open market

Dollar hits in open market – The US dollar hit 302 against the rupee in the open market went going beyond the boundaries marked by the International Monetary Fund (IMF) to keep the difference in open and interbank exchange rates in the range of 1 per cent to 1.5 per cent. The reason cited for this increase is not due to its shortage but reflected the political uncertainty surrounding the caretaker administration. It was also circulated in the market the IMF wanted 20 per cent devaluation of the rupee in the current fiscal year implying that the dollar should be in the range of Rs.330-340 by the end of June next year. It is widely believed that despite the higher foreign exchange reserves of the State Bank, the dollar is on the rise due to this arrangement with the IMF. The prevailing worry is expressed about the grey market that attracts dollars at prices much higher than those in the open market. The current grey market dollar price was about Rs.315 and the fears are that it would keep rising along with the price hike in the domestic market. To get rid of this, the market needs to be deregulated. If there is material dollar demand, no amount of devaluation will erase the premium. The Weekender