Rupee closes weaker by 30 paise at 44.99 against the Dollar

Mumbai, Nov 13 (UNI) The rupee today closed to a ten days low of 44.99/45.00 against the US Dollar compared to the previous close of 44.70/72, on sustained buying support in dollar by banks and some corporate sectors.

The Indian rupee extended its losses into a second session on Monday against the dollar and ended up 30 paise lower after dealers said the central bank had again intervened in the market.

The partially convertible rupee finished at 44.9825/99 against the dollar, down 0.6 per cent on the day and 1.4 per cent off an eight-month high of 44.35 hit on Friday. It was the weakest close since October 31, when it ended at 45.01/02.

The market is of the opinion that sustained central bank intervention drew the rupee down to 45 against the dollar.

The Reserve Bank of India (RBI) was suspected of intervening on Friday when the rupee fell sharply from its high. Central bank chief Y V Reddy said on Friday the RBI monitored exchange rate volatility and intervened when necessary.

The RBI does not have an explicit target or range for the rupee, but says it intervenes to smooth volatility and prevent the currency from straying too far from what it considers fair value.

A chief dealer at a large local company said the rupee's fall could draw more overseas investors to local stock markets, which ended at another record high on Monday.

The benchmark BSE index ended up 0.87 per cent at 13,399.00 points, a record close, and just off a new peak of 13,410.08 set during the day.

Foreign buying of local equities has topped a net USD 7 billion so far in 2006.

During the whole day's session trade, six-month forward premia was lower at 1.75/1.77 per cent against 1.78 per cent on the previous day and one-year forward premia quoted also weaker at 1.65/1.67 per cent comparedd to 1.70 per cent on the previous day.

The Reserve Bank of India (RBI) today fixed the reference rate at Rs 44.90 per US Dollar, down by 45 paise from it's Friday's rate of Rs 44.45 per US Dollar, a RBI spokesperson said.

However, the performance of the Rupee against other currencies was mixed. The domestic currency closed down against the Euro at Rs 57.57/70 (57.53/55) per unit. Against the Pound Sterling, it was at Rs 85.60/62 (85.63/65) per unit and against the Japanese Yen, it was at Rs 38.14/16 (38.05/07) per 100 units, dealers said.

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