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Our Bureau

Mumbai, Oct. 3 The rupee rose to a fresh nine-year high of 39.58, with most of the gains coming in during the last one hour of trade. Foreign exchange dealers said that the rupee witnessed a steep gain during the latter part of the trading session.

Dealers felt that the steep appreciation of rupee towards the close of the day was mainly due to the absence of RBI’s intervention in the forex market.

“RBI is usually most active during the last hours of trading as it is wary of the rupee ending strong,” said a dealer with a private bank. Market participants were also of the opinion that the banks were short selling dollars and covering their positions at a profit when the rupee showed no signs weakening.

“Banks began to sell dollars just to see if the RBI was there in the forex market. Once they realised that the central bank was not intervening they began to sell further leading to the sharp appreciation of rupee,” said Ms Tarini Vaidya, Country Treasurer, Centurion Bank of Punjab.

The rupee opened at 39.85 and moved in the range of 39.75-39.89 during the major part of the day before closing at 39.58.

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