Rupee closes at 41.09 against USD

Mumbai, Apr 27: The Indian Rupee today eased and closed at 41.09 against the US dollar compared to its previous close of 40.89/90, on demand for dollars from oil refiners for import payments and short-covering of positions in the US unit, traders said.

Yesterday, the Indian currency had hit a peak of 40.60 - its highest since May, 1998, buoyed by the robust capital inflows.

The domestic unit touched a day's high of 40.96 in the earlier session.

Banks that had sold dollars in the cash-spot market yesterday for settlement on Monday were caught wrong-footed when the Rupee eased, and were scrambling to cover their positions, a leading dealer said.

The Rupee has risen about 6 per cent this month and is nearly 15 per cent up from a three-year low of 47.04, hit last July, dealers added.

Buying of local equities by foreigners has boosted dollar supplies. Foreign funds bought a net USD 1.3 billion of shares this month and closed to USD 2.9 billion during 2007, dealers added.

Forward premia shot up sharply after the relentless slide in spot dollar/rupee had levels dragged lower in the last few sessions.

Premiums at some months climbed as much as 30 paise though forward dollars still remained cheaper if compared with the last week.

Six-month and 12-month forward premia closed at 6.80 per cent (6.55) and 5.12 per cent(5.00) respectively.

The Reserve Bank of India (RBI) today fixed the reference rate at Rs 41.07 per US dollar, down by 29 paise from its yesterday's rate of Rs 40.78 per USD, according to a RBI spokesperson here.

Against the Euro, the domestic unit closed at 55.67 per unit each, against Pound it finished at 81.60 per unit each and the Yen was quoted at 34.20 per 100 units each, said traders.

UNI