Rupee Ends Stable Versus Dollar in Volatile Trade.

In volatile trade, hefty foreign fund flows into stocks kept the rupee nearly stable to close at 44.35/36 against the US currency despite sharp fall in domestic equities.

In a two—way fluctuation at the Interbank Foreign Exchange (Forex) market, the domestic unit opened lower at 44.42/43 a dollar from yesterday’s close of 44.36/37.

Later, it dropped further to the day’s low of 44.55 on good dollar demand from importers as well as initial weakness in local equities.

Strong dollar overseas against its six major rivals too impacted the rupee sentiment. The dollar index was up by 0.45 per cent in London today.

However, sustained capital inflows amid dollar selling by exporters and banks helped the rupee to bounce back to a high of 44.19.

Foreign Institutional Investors pumped in over USD 4 billion in the current month so far, taking the total inflows in 2010 till October 18 to nearly a record USD 23.7 billion.

Late sell—off in stocks weighed on the rupee and it fell back to settle the day at 44.35/36. The BSE benchmark Sensex closed down by 185.76 points or 0.92 per cent.

Meanwhile, global crude oil was quoting around USD 82 a barrel in London this afternoon.

The rupee premium for the forward dollar ended mixed on alternate bouts of buying and selling. The benchmark six—month forward dollar premium payable in March finished slightly weak at 125— 127 paise from 126—1/2—128—1/2 paise on Monday while far—forward maturing in September settled higher at 235— 237 paise from 228—1/2—230—1/2 paise previously.

The Reserve Bank of India has fixed the reference rate for the dollar at Rs 44.46 and the euro at Rs 61.85.

In cross—currency trade, the domestic unit firmed up against the pound sterling, the euro and the Japanese yen.

The rupee improved further to Rs 69.92/94 per pound sterling from Monday’s close of Rs 70.49/51 and remained firm at Rs 61.58/60 against the euro from Rs 61.63/65 previously.

It, however, recovered against the yen to Rs 54.40/42 per 100 yen from its last close of Rs 54.59/61.

Source : thehindu.com