Rupee remains firm at 43.15/16 on strong USD

Mumbai, Mar 28: The Rupee today opened firm at 43.15/16 against the US dollar compared to its previous close rate of 43.29/30, brokers said.

The Indian currency traded just below its strongest level in more than seven years today as banks continued to sell dollars to generate funds to tide over a cash crunch in the money market.

Later, the Rupee traded between 43.15/16 and 43.20/21 per dollar.

A break of 43.11 would take it to its strongest level against the dollar since November 1999.

The Rupee was up from Monday's close of 43.29/30, which was a 20-month peak. The Mumbai market was closed on Tuesday for a holiday, though some trading took place in smaller centres.

Call rates were at 25-30 per cent today, compared with 6-7 per cent when cash conditions are normal. Funds with banks dwindled this month after companies made advance tax payment of around Rs 30,000 (USD 6.9 billion).

Adding to concerns about the supply of cash, the Central Bank will sell Rs 6,000 crore of market stabilisation scheme (MSS) bonds today, with settlement tomorrow.

Investors also looked for signs of Central Bank intervention. The Reserve Bank of India (RBI) has regularly sold dollars since November, but it has been absent over the past week as the squeeze on cash pushed the Rupee higher, dealers added.

UNI