Rupees opens flat at 44.17/18 per USDollar

Mumbai, Feb 13: The rupee today opened steady at 44.17/18 against US dollar on scattered demand of dollar by local bankers.

The Indian rupee fell to a two-week low against the dollar on Tuesday on fears of a stock market decline, with sentiment also hit by recent suspected Central Bank intervention to block gains.

Later, the partially convertible rupee was at 44.20/21 per dollar, extending its retreat from a 16-month high of 44.03 hit on Friday after it had closed at 44.15/16 on Monday.

The 30-share index, which fell 2.4 per cent on Monday, fell 1.2 per cent in early deals on Tuesday before paring its losses. The market fears that such falls may see foreign funds pull out some of their investments, putting selling pressure on the rupee. Expectations of outflows related to recent offshore corporate acquisitions also weighed on the rupee.

Traders expect the Indian companies to raise at least part of the payments at home and then convert the funds into foreign currency, which would weaken the rupee.

The presence of the Central Bank also boomed after its suspected intervention this year to weaken the Indian currency.

The Central Bank bought about billion in November and December, and is uncomfortable with the pace at which the rupee has appreciated. It has gained about 6.5 per cent since it hit a three-year low in July, traders said.

UNI