Rupee inches up by three paise against USD during week

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Forex
Mumbai, Mar 1: The Rupee gained three paise against the US Dollar at 40.01/02 amid lacklustre activity in the interbank foreign exchange (Forex) market during the week due to the Union Budget 2008-09.

The partially convertible Indian currency almost remained rangebound near the level of 40.00 per dollar, throughout the week, though it moved in a wide range gap between 39.75 and 40.07 per dollar on alternate bouts of inflows and outflows in the Indian equity market, dealers said. Dealers opined the local unit remained rangebound against the greenback this week, as the volume of trade was relatively less due to the Union Budget presentation.

The indian currency strengthened in few sessions of the week on the prospect of further Fed rate cuts weighing on the dollar.

Dealers also anticipated a spurt in foreign buying of equities and other assets in the future session, as the prospect of more rate cuts by the US Federal Reserve had knocked the dollar lower in the global market. Reportedly, Federal Reserve Chairman Ben Bernanke signalled a readiness to cut interest rates again.

''The dollar is under renewed pressure across the world, which is reason for the Rupee gaining strength against the US currency,'' a dealer with a leading private bank said.

The local unit is expected to weaken in the next week. ''Exporters and foreign banks are expected to come in for selling at these levels which will push the rupee to appreciate further,'' Development Credit Bank Associate Vice President Treasury and Financial Insititutions Group, Navin Raghuvanshi said.

Last week, the Indian currency hit a five month low at 40.25 per dollar.

Meanwhile, country's foreign exchange reserves has increased by USD 1.754 billion to USD 294.610 billion for the week ended February 22, due to rise in foreign currency assets, according to the weekly statistical supplement from the Reserve Bank of India.

UNI

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