The Hindu Business Line : Re rises further tracking equities

The rupee rose further against the dollar tracking the upswing in the domestic stock market. The domestic currency opened at 40.20 and touched an intra-day high of 40.03. It then fell to end at 40.12, against the previous close at 40.26/27. Forex dealers said that foreign banks were seen selling dollars. "Although exporters were seen selling dollars, there was a lot of inter-bank activity. Foreign banks were selling dollars possibly on behalf of foreign institutional investors," said a dealer at a private bank.

However, the RBI intervened to buy dollars when the rupee touched the intra-day high of 40.03. Market participants expect the rupee to remain rangebound and continue tracking the movement in the stock market. There was a fall in forward premia as exporters were selling and booking profits. "As the RBI stepped in to buy dollars in the market, there was some anxiety that a dollar shortage could occur again," said a dealer. The 6-month forward closed at 1.61 per cent (1.72) and the 12-month ended at 1.23 per cent (1.27). - Our Bureau

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