Rupee closes weak at 44.20/21 against US dollar

Mumbai, Feb 23 (UNI) The rupee today closed lower at 44.20/21 against US dollar from its previous close of 44.25/26 at the Interbank Foreign Exchange (Forex) market here on sustained good buying support of dollar by foreign and nationalised banks.

The domestic unit opened higher at 44.24/26 against the previous day's close of 44.25/26 on scattered selling pressure of dollar by bankers. Later, it recorded a low at 44.30/32 and a high at 44.20 during the intra-day trades. Business volume was moderate on lack of fresh demand of dollars by local dealers, dealers said.

The Rupee weakened to close at 44.30 intra-day, as persistent dollar absorption by state-run banks now appeared to have created a dollar shortage despite investment flows having been healthy.

Traders were inclined towards covering short dollar positions even as oil companies were observed buying dollars as well. Genuine dollar requirements traditionally emerge towards the end of the month. Weak Asian currencies contributed in parts to the rupee's weakness especially in the early deals as did the local stock market.

Forward premia ended 2-4 paise lower on account of buy-sell swap contracts. Six-month and 12-month forward premia closed at 3.17/18 per cent (3.09/3.10) and 2.98/3.00 per cent (2.96/98) respectively.

Earlier in the day, the Reserve Bank of India (RBI) today fixed the reference rate at Rs 44.28 per US dollar, down by three paise from its yesterday's rate of Rs 44.25 per US dollar, according to the RBI spokesperson.

In cross-currency trade, the rupee ended firm against all the three major currencies. Euro closed at Rs 57.94/96 (57.98/58.00) per unit. It closed for Pound at Rs 86.50/52 (86.28/30) per unit and Rs 36.38/40 (36.40/42) per 100 units for the Yen, traders added.

UNI