Financial Daily from THE HINDU group of publications
Wednesday, Jul 14, 2004
Financial Daily from THE HINDU group of publications Wednesday, Jul 14, 2004 |
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Money & Banking
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Forex Rupee sheds 18 paise Our Bureau
MUMBAI: The rupee ended at 45.86/88 on Tuesday, weaker by about 18 paise, on the back of sustained demand for greenback throughout the day. On Monday, the domestic currency closed three paise higher at 45.68/70. The rupee touched a high of 45.69 during the day's trade. "There was good corporate demand for dollars from both oil companies and a few heavy weight engineering companies through the day. Some buying was also seen on account of defence payment," said a senior dealer from a large bank. "Rupee moved in a one-way direction today. Some dollar inflow by way of trade was seen, mostly through foreign and private sector banks. But once those supplies were exhausted rupee depreciated further," said a private banker. Some unwinding of short positions taken during the day was done towards the end, he added. The expectation of the market players points towards a short-term volatility in the domestic currency. But in the long run they expect the rupee to climb higher. "Foreign inflows in huge quantum might be in the offing following the hike in FDI ceiling on capital-intensive sectors like telecom and civil aviation," said a dealer with a private sector bank. The forward premiums moved up over 10 basis points on account of importer covering. The six-month forward closed at 1.51 per cent (1.40 per cent) while the one-year forward closed at 1.43 per cent (1.30 per cent).
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