Rupee opens ten months high at 44.24/26 against per US dollar

Mumbai, Dec 29: The Rupee opened at 10 months high at 44.24/26 against per US dollar on the last trading session of 2006 today from the its last close of 44.25/26, dealers said.

The Indian Rupee opened at a 10-month high, as banks sold dollars to meet funding needs in a scarcely cash market.

Strong exporter selling pushed the Rupee higher, but market worries that the Central bank may step in to prevent further appreciation.

Later, the partially convertible Rupee was at 44.1800/44.1900 per dollar, up from Thursday's close of 44.25/26.

Holding long dollar positions is supposed to be a very expensive proposition at the moment, with call money rates floating around the 19 per cent mark.

The Indian Rupee has gained in recent months, helped by strong capital inflows into local equities, after a three-year low of 47.04 in July. It has gained 6.5 per cent since then, and about 1.9 per cent since the end of 2005.

Foreign funds have brought more than USD 8 billion worth of Indian equities this year. The Rupee's yield attraction increased after the Central bank said it will raise the cash reserve requirement for banks, tightening the supply of cash and pushing up market rates.

Further gains in the Rupee may be curtailed ahead of a batch of economic data due later in the session. The quarterly balance of payments, external debt, weekly inflation and forex reserves will be out today, brokers said.

UNI