Rupee opens low at 42.90/91 against USD

Mumbai, Apr 12 (UNI) The Rupee today resumed softer at 42.90/91 against per US dollar as compared to the previous day's close of 42.86/88 as oil refiners stepped up dollar purchases and on fears that foreign investors might pare holdings in local equities, dealers said.

The worries of central bank's intervention loomed large over the market, deterring the market from building long positions in the Rupee.

Later, the domestic unit recorded a low of 42.93/94 per dollar and a high of 42.94 in the mid-morning session.

The central bank bought a record USD 11.9 billion from the currency markets in February. It was the fourth consecutive month the central bank has intervened to try and stem the Rupee's rise.

The home currency has gained for three quarters in a row and is up nearly 10 per cent from a three-year low of 47.04 in July.

The central bank is thought to be uncomfortable with the Rupee's pace of appreciation. Investors say the RBI intervenes to maintain exporters' competitiveness, and also to smooth excess volatility.

The strong demand for dollars from oil companies in the morning session helped weaken the Rupee. Oil is India's largest import.

The Rupee was likely to come under pressure, if investors pared their investments in equities, given weakness in US and Japanese stock markets, dealers added.

UNI