Rupee recovers by 16 paise at 41.59/60 per US dollar

Mumbai, May 9: Rupee today recovered smartly by 16 paise after a weak trend in last three days and ended positive at 41.59/60 per US dollar from the last close of 41.76 on modest dollar purchases by oil importers and some short-covering by local operators.

The rupee moved away from a year's low at 41.76 yesterday, as banks cashed in on differentials between the local and overseas rates, but record oil prices kept sentiment wary about possible widening of trade deficit. The partially convertible rupee was at 41.72/74 per dollar at the opening session, off an intraday high of 41.33 and also low of 40.75 per US dollar.

Traders said a few banks bought rupees cheaper locally to arbitrage in the overseas non-deliverable forward (NDF) market. Oil, India's biggest import, hit a record high above USD 124 a barrel. India imports 70 per cent of its oil needs, and crude refiners are among the biggest Indian buyers of dollars.

The rupee saw a steep fall of Rs 1.05 in the last three days following the bearish phase in Indian bourses.

Reserve Bank of India today fixed the reference rate for US Dollar at Rs 41.38, down by 41 paise from yesterday's rate of Rs 41.79 per USD.

The six-month premium was quoted at 1.23/25 (1.56/58) per cent and annualised premium closed at 1,13/15 (1.37/39) per cent.

The local currency ended the day at 64.05/07 (64.07/09) against the Euro, 80.80/82 (81.58/60)per unit against the Pound Sterling and 40.34/36 (40.06/08) per hundred units against the Japanese Yen, dealers said.

UNI