Rupee opens 9 months higher at 44.40/42 against US dollar

Mumbai, Dec 27: The Rupee today opened nine months higher by four paise and was quoted at 44.40/42 per US dollar against the previous day's close of 44.44/45 per USD, dealers said.

The Indian Rupee rose to its highest in more than nine months on Wednesday as banks and companies sold the dollar for the higher-yielding rupee as a cash crunch in the domestic banking system weighed.

Later the partially convertible rupee was at 44.38/44.39 per dollar after touching 44.3150, a level it last tested on March 6. It was 0.14 per cent higher than a previous close of 44.44/44.45 per dollar on Tuesday.

Domestic overnight funds rate have shot up to 13 per cent, the highest in six years, after the central bank's first phase of a 50-basis point increase in the cash reserve ratio, which is the amount of funds banks have to deposit with it, kicked in on Saturday.

''Overnight call money is unlikely to come off by a huge margin this week, unless there is huge spending by the central government or an aggressive bout of dollar buying by the central bank,'' said a leading broker.

''Liquidity is really tight and that is holding back traders from taking long dollar positions,'' he added.

UNI