Rupee resumed flat at 39.88 per USD. Later it fluctuated in a narrow range between 39.86 and 40.01 and ended at 40.01/02 per dollar, losing ground from the previous finish of 39.87/88. It hit a five-month low of 40.25 last week. The indian currency strengthened in the last two days on the prospect of further Fed rate cuts weighing on the dollar.
Reportedly, Federal Reserve Chairman Ben Bernanke signalled a readiness to cut interest rates again, dealers opined.
However, dealers anticipated a spurt in foreign buying of equities and other assets. The prospect of more rate cuts by the US Federal Reserve knocked down the dollar lower in the global market, dealers said.
Meanwhile, the six month premium was quoted lower at 0.18 (0.20) per cent and annualised premium closed at 045 (0.47) per cent and the Reserve Bank of India today fixed the reference rate for the US dollar at Rs 39.92, up by eleven paise from previous rate of Rs 39.81.
The Indian unit ended weaker at 60.70/72 (60.12/14) against the Euro. Rupee closed weaker at 79.31/33 (78.93/95) per unit against the Pound Sterling. It ended at 38.35/37 (37.42/44) per hundred units against the Japanese Yen.