New Delhi. The rupee has been weakening against the dollar for the last few trading sessions. Now the Reserve Bank (RBI) is taking steps to support its currency. News agency Reuters quoted sources as saying that the RBI is selling US dollars to reduce the pressure on the rupee.

This is having some effect on the rupee. In Friday's trading session, the rupee opened at 83.48 against the dollar, while in the previous trading session it closed at 83.50. This means that there was no significant change in it compared to the previous trading session and it opened almost as it was.

Why did the rupee come under pressure?

There has been a continuous sell-off in the Indian equity market for some time now. Foreign investors are withdrawing due to concerns like low voting. However, the focus of domestic institutional investors is on buying. Still, the volatility in the equity market has increased significantly. At the same time, the demand for dollars from local importers is also increasing rapidly.

Due to all this, there was a lot of pressure on the rupee and it was continuously increasing. This is the reason why the Reserve Bank had to take precautionary steps like selling dollars. Reuters quoted a foreign exchange trader of a private bank as saying, "RBI is probably selling dollars through government banks near the level of 83.50. The aggressive manner in which the central bank is defending the rupee does not seem to indicate that there is going to be any major fall in the rupee in the near term."