Rupee closes at 40.42/43 per dollar

Mumbai, Aug 2: The Rupee today closed firm at 40.42/43 per US dollar after staying highly volatile throughout the day as confusion gripped the forex market over the nature of inflows likely to come about next week.

The unit had closed at 40.45/46 yesterday.

Market observers said tuesday's hike in Cash Reserve ratio (CRR) is expected to stage its part in the market next Monday when the hiked reserve rates will become effective.

In the morning, rupee opened at 40.44/45 per dollar slightly stronger from the previous close of 40.45/46 per dollar and later inched up to a day's high of 40.39 per dollar before tumbling by 8 paise in the late day trade to 40.47 per dollar. Rupee later closed the day's trade at 40.42/43 per dollar.

''Hike in CRR accompanied by rest of the measures adopted by central bank can tighten the liquidity conditions, which may, in turn, exert pressure on Rupee value.

Rupee may stage a comeback in coming weeks along with a jump in call rates.'', said a leading dealer.

Meanwhile, forward contarcts bettered margins during the day as six-month premia ended at 1.93(1.82) per cent and annualised premia at 1.89 (1.79) per cent.

Rupee was weak against major world currencies today. Against Euro, it ended at 55.22(55.17/18) per unit. Against Pound Sterling, it closed at 82.00(81.82) per unit, while against the Japanese Yen, it was quoted at 34.00(34.06/07) per hundred units each.

Reserve Bank today fixed the reference rate at Rs 40.43 per US dollar, up by twelve paise, compared to its yesterday's rate of Rs 40.55 per dollar.

UNI