The Hindu : Business : Rupee loses ground

Online edition of India's National Newspaper
Wednesday, Apr 07, 2004

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Business

Rupee loses ground

MUMBAI, APRIL 6. The rupee lost considerable ground against the U.S. currency today on renewed heavy dollar demand from corporates and importers, but ended off early lows, supported by steady trade and foreign capital investment inflows.

In choppy two-way trade at the interbank foreign exchange market, the rupee closed at Rs. 43.74/75 a dollar, a six paise decline from Monday's finish of 43.68/69, but a moderate rally from early lows of 43.77/78. It opened on a positive note at 43.6750/6850.

Renewed heavy dollar demand from corporates and importers drove the rupee sharply lower, but steady foreign fund inflows partly cushioned the currency's fall.

A sharp dollar rally against major global currencies overseas also weighed on rupee value, dealers said.

The dollar had its biggest rally in six weeks against the yen in Tokyo today and rose by three per cent against the euro on increasing speculation the Federal Reserve will raise interest rate this year, after activity in the U.S. services industries rose to a record high.

Although, the rupee weakened considerably, sentiments remain positive for the currency due to rising trade and foreign capital investment inflows.

— PTI

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