Rupee firms up to close at 40.70/71 per dollar

Mumbai, May 18 (UNI) The rupee continued its gains on the last day of the week and firmed up smartly by nearly 15 paise from the previous close to settle at Rs 40.70/71, despite lossses in initial trade.

The currency opened lower at Rs 40.87/88 from the previous close of Rs 40.85/86 for a dollar.

There was a good dollar buying spree from PSU banks in the initial trade, but at the end of the day the foreign banks pressed sales after a report of rate revision in China, dealers said.

China's central bank today said it would raise both interest rates and banks'required reserves.

The one-year lending rate will increase by 0.18 percentage point and the one-year deposit rate by 0.27 percentage point, effective from May 19.

The forward premia today declined marginally. The six month forward premia were quoted at 4.46 per cent (4.50) and 3.95 (4.00) respectively.

The Reserve Bank of India (RBI) kept unchanged the reference rate at Rs 40.84 per US dollar.

The spot rupee posted gains against the major world currencies.

Against Euro, the rupee closed up at 54.31 (55.25) per unit, against Pound it finished higher at 79.42 (80.80) per unit and the Yen it was also ended up at 33.34 (33.75) per 100 units each, dealers added.

UNI