A corollary to the rupee appreciation against the euro and depreciation against the US dollar in the early months of 2010 was the worsening of the excess demand for foreign currencies – importers, looking for dollars, were keen to purchase foreign currency and exporters, with export earnings mostly in euros, more inclined to stay on the sideline.
At the request of the State Trading Corporation which encountered difficulties to obtain foreign currency from the market to meet the import bill for food staples and fuel, the Bank agreed to meet its foreign exchange requirements as from June 2010 through direct sales.