The rupee dropped by 12 paise to 79.06 against the US dollar in early trading on Thursday as the hawkish situation of the US Federal Reserve increases the chances of inflation this month.
However, measures announced by the Reserve Bank of India (RBI) on Wednesday limit the depreciation of a rupee, according to forex traders.
In the interbank foreign exchange, the rupee opened at 79.05 against the US dollar, then lost its quote from 79.06, recording a fall of 12 paise since the last quarter.
In the first trade, the rupee saw a rise of 78.90 against the American currency. On Wednesday, the rupee closed at 78.94 against the US dollar.
The RBI has taken several steps to increase forex penetration to limit the fall of the rupee, said Sriram Iyer, Senior Research Analyst at Reliance Securities.
“It will be difficult to determine the amount of flow that comes to the market but the methods can provide stability to the rupee,” notes Iyer.