The Hindu : Business : Rupee moves up further

Online edition of India's National Newspaper
Tuesday, Sep 14, 2004

Business

Business

Rupee moves up further

MUMBAI, SEPT. 13. Buoyed by an increase in cash reserve ratio (CRR) to 5 per cent, the rupee today scaled a nearly eight-week closing high against the U.S. currency at 46.1650/1750 a dollar, backed by strong trade and foreign fund inflows. Extending weekend gains, the rupee spurted by another ten paise from last Friday's close of 46.2650/2750 as sentiment turned further upbeat for the currency after the Reserve Bank of India in a bid to contain rising inflation, raised bank's CRR to 5 per cent, dealers said.

In volatile trading at the interbank foreign exchange market, the rupee resumed on a firm note at 46.23/24 and steadily ascended to a nearly 8-week peak of 46.1650/1750 per dollar, within striking distance of 46.13/15 struck at the close of business on July 21.

The rupee appreciated by nine paise last week. The RBI late last week raised the CRR of banks by 50 basis points to 5 per cent in two stages beginning fortnight September 18.

``Already on a firm keel due to bunched up weekend dollar supplies, the rupee got a further boost after banks, corporates and exporters sold dollars for rupees in anticipation of tightened liquidity conditions,'' a forex dealer said. Traders expect the rupee to consolidate gains tomorrow. — PTI

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