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Wednesday, December 20, 2000

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Rupee gains 4 paise against $

MUMBAI, DEC. 19. The rupee ended sharply higher against the U.S. currency today on renewed inter-bank dollar sales amidst slack demand in moderately active trading at the foreign exchange market.

Opening on a firm note around Rs. 46.71/72 a dollar, the Indian unit strengthened further to close at 46.6850/6950, another four paise gain from the previous closing level of 46.7250/7300. It had risen by a similar margin on Monday.

Unwinding of long dollar positions by banks in the absence of adequate demand continued to give the rupee underlying support.

Banks sold dollars because they did not want to keep long dollar positions, as today's spot contracts would only be settled on Friday due to the nationwide strike by bank workers on Thursday, dealers said. Moreover, banks wanted to avoid the increased carrying costs for the longer-than-usual settlement on their dollar positions, given the high call rate, they added.

Call rates hovered around relatively high levels of 8.40-8.60 per cent at the overnight call money market.

- PTI

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