Rupee breaks 40.50 mark as RBI stays away from scene

Mumbai, Jul 4: Rupee today broke the psychological barrier of40.50 largely, benifiting from enormous inflows and the Reserve Bank ofIndia staying away from the scene to facilitate the currency's gain.

Rupee ended at 40.44/45, gaining 10 paise from the previous closeof 40.54 per US currency and is likely to surge further unless ReserveBank gets into the market, dealers said.

''RBI didnot intervene in the market as it did in the past fewconsecutive days. The unit may cross the 40.00 mark in coming one monthif the Central Bank goes ahead with this stand,'' said Paresh Nayar,Chief Forex Dealer, Development Credit Bank.

Rupee opened at 40.55/57 in the morning, nearly flat toyesterday's close and went down to 40.58 by noon but later gainedimmensely from inflows and a weak dollar.

''The weak US currency and abstinence of Reserve Bank fromintervening on Rupee has kept the unit as the best performing AsianCurrency. Rupee's move in coming sessions will be in line with thegovernment's policy,'' said K Dhanasekhar, Senior Forex Dealer, CanaraBank.

Rupee also drew correlation from the boom in indices which bettered by 73.73 points today to 14,880.24, sources said.

Forward premia continues to remain at the lower end as six monthpremia ended at 2.15(2.13) and annualised premia at 2.23(2.26).

Meanwhile, Rupee has bettered performance against majorcurrencies. Against Euro it ended at 55.03(55.26) per unit each, at81.50(81.93) against Pound Sterling while Japanese Yen was quoted at33.00(33.68) per 100 units each.

Reserve Bank of India today fixed the reference rate at Rs 40.49per US dollar, up by nine paise from its yesterday's rate of Rs 40.58per USD.

UNI