The Hindu : Business : Rupee gains 82 paise against $

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Tuesday, Nov 04, 2008
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Rupee gains 82 paise against $

MUMBAI: Responding to the Reserve Bank of India’s (RBI) decision to inject more liquidity, the rupee on Monday gained a huge 82 paise to close at a three-week high of 48.64/65 against the U.S. dollar. It closed at 49.46/47 on Friday last.

Dealers in foreign exchange market said the rupee was aided by slackness in demand for dollar. Strong equity markets also bolstered the domestic unit, they added.

The Indian currency reversed its losing-spree of the past many weeks during which it had hit an all-time intra-day low of 50.15 a dollar (on October 24). It started gaining continuously as the equity markets sustained their rally with the benchmark Sensex gaining 1828 points since October 28.

The interbank foreign market witnessed fairly good activity during the day with the domestic currency moving in a range of 48.64 and 49.07. It opened firm at 49.04/05.

Dealers said foreign banks in the afternoon trade heavily sold dollars which were partly absorbed by importers.

On November 1, the RBI slashed the Cash Reserve Ratio (CRR) by 100 basis points and the repo rate by 50 basis points. The apex bank also reduced the Statutory Liquidity Ratio (SLR) by one percentage point to 24 per cent. All these measures would inject an estimated Rs. 85,000 crore into the system.

The rupee premiums on forward dollar ended lower due to sustained receiving by exporters.

In cross-currency trades, the rupee also appreciated sharply against the pound sterling, the euro and the Japanese yen.

The rupee spurted against the pound sterling to end the day at Rs 78.71/73 per pound from last weekend’s close of Rs 80.22/24. — PTI

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