The Hindu Business Line : Rupee firms up

Strong foreign inflows into the capital market helped the rupee gain over 20 paise against the dollar on Friday. The rupee opened at 40.07/08 and dropped to 40.09 by 11 a.m. in the morning. However, after that the dollar started declining and by 1 p.m., the rupee breached the 40 level. It closed at 39.88 against the previous close of 40.10, a gain of 22 paise. According to Mr Sanjay Arya, Deputy General Manager, Bank of Maharashtra, the rupee gained because lot of foreign banks were seen selling dollars. The selling could have been on behalf of foreign institutional investors, considering that the stock market gained, he said.

Also, the Reserve Bank was not buying dollars in the market to stem the rupee's gains, as it has done earlier. Exporters may also have sold dollars ahead of the year-end, Mr Arya said. While the rupee's likely movement next week will depend on further FII inflows, it is likely to remain strong and trade between 39.7-39.8, said dealers. In the forward premia market, the six-month premium closed at 2.13 per cent (2.09 per cent) and the 12-month at 1.53 per cent (1.46 per cent). - Our Bureau

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