Mumbai, Sep 23 (UNI) The Rupee today rallied by 27 paise to end firm at 45.72/74 against the US dollar from its last close of 45.45 on brisk dollar demand from banks and oil sectors.
The rupee opened weak at 45.60 from its previous close on sustained dollar selling pressure by local operators.
Dealers said Rupee firmed toward the end of the session, tracking high oil prices and lower stocks that raised worries of more foreign fund outflows but easing of foreign borrowing norms failed to provide any respite.
Later, the domestic currency was trading in a small range between 45.45 and 45.90 per dollar during the sesson.
According to marketmen, the rupee is likely to remain in the 45.25-45.65 region for the next few days. While the dollar has weakened overseas, the arbitrage opportunity between the domestic forex market and the offshore non-deliverable forwards (NDF) market has also come down. According to a trader with a private bank, the narrowing in the spread between the onshore spot rate and the offshore one-month rate to around 10 basis points helped the rupee.
One-month offshore NDF contracts were quoted at 45.56/66-levels.
Foreign banks had actively taken advantage of the arbitrage opportunity in the past few weeks, which had caused the rupee to fall to two-year lows of 46.99 last week.
Meanwhile, The Reserve Bank of India (RBI) today fixed the reference rate for US dollar at Rs 45.72 per unit, up by 32 paise, against yesterday's rate of Rs 45.40 per dollar.
The reference rate for Euro increased by Rs 1.86 paise at Rs 67.60 per unit, from yesterday's close of Rs 65.74 per unit, a RBI release stated.
However. The six-month and annualised forward dollar premium was quoted lower at 1.55 (1.72) per cent and 1.32 (1.40) per cent respectively.
The Rupee ended the day a gainer at 67.20/22 (66.28/30) per unit against the Euro. It closed at 84.54/56 (83.66/68) per unit against the Pound Sterling. Rupee ended at 43.20/22 (42.62/64) per hundred units against the Japanese Yen.
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