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Our Bureau

Mumbai, March 20

The rupee gained on good inflows and a positive equity market on Monday. The central bank was also seen buying dollars to keep the rupee from rising above the 44.35 levels, said dealers.

The rupee opened at 44.40/41 and touched a low of 44.45 before closing at 44.40/41, against 44.45 on Friday. The inflows into the equity market also helped the rupee gain. There was good dollar supply around 44.45/50 levels.

"The RBI was seen buying at 44.35 levels, so the rupee did not breach this level," said a dealer with a private bank.

According to the dealer, this is an easy tool to induce rupee liquidity in the market. "The rupee is overvalued by over 8.5 per cent according to the REER and rupee liquidity is still tight. Therefore, the RBI is buying dollar to support it."

The forward premia were steady, with the one year closing at 2.05 per cent and the six-month closing at 2.57 per cent.

The dollar was range-bound against overseas currencies such as the euro and the yen, the dealer said.

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