Rupee closes at ten month high against USD at 44.25/26

Mumbai, Dec 28: The Rupee today closed at a ten month high of 44.25/26 against the US dollar with a modest gain of five paise compared to the previous close of 44.30/31, on heavy selling by foreign banks and local investors, dealers said.

Rupee rose to its highest level in more than 10 months, bolstered by severe cash shortage in the money markets. Good capital inflows also prompted traders to sell dollars in the spot market.

Dollar demand, mainly from oil firms, kept the Rupee on hold.

Markets expect the Rupee to appear firm by the end of 2006.

Forward premia appeared to be choppy throughout the day.

Six-month and Twelve-month premia ended at 3.76 per cent (4.50 per cent) and 3.03 per cent (3.65) respectively.

The Reserve Bank of India (RBI) today fixed the reference rate at Rs 44.36 per US dollar, up by three paise from yesterday's rate of Rs 44.39 per US dollar, a RBI spokesperson said here.

However, the performance of the domestic unit against other currencies was mixed. The Rupee was down against the Euro at Rs 58.19/21 (58.60/62) per unit, it was Rs 86.76/78 (87.30/32) per unit against Pound Sterling, and was at Rs 37.50/52 (37.60/62) per 100 units against the Japanese Yen, dealers said.

UNI