Rupee gains; closes at 40.89/90 per USD

Mumbai, Aug 22: The Rupee continued its upward movement for the second straight day today, registering a sharp rise of another 20 paise to close at Rs 40.89/90 per US Dollar today.

Except the Foreign Institutional Investors (FIIs) factor, there was no genuine demand for the local currency, dealers said adding that the FIIs activities in the stocks alone fuelled rupee's rally against US Dollar.

According to dealers, during the early day session rupee opened at 41.05/06 per dollar, touched a low of 41.07/08 per dollar and a high of 40.89/90 before finishing at Rs 40.89/90 from the previous close of Rs 41.09/10.

''The market seems to completely influenced by the stock market for last two days and may continue the same trend atleast few trading sessions'', a senior dealer at the leading private commercial bank said.

It is expected that rupee will further gain strength in next sessions, attaining a level in the range of 40.75/85, dealers opined.

The Reserve Bank of India (RBI) today fixed the reference rate at Rs 41.01 per US dollar.

The reference rate was up by five paise, compared to yesterday's rate of Rs 41.06 per USD, an RBI spokesperson said.

In the forwards, 6th month forward premia quoted higher at 1.54 (1.38) per cent and and 1-year premia ended higher at 1.61 (1.50) per cent.

Like the gain against US Dollar, Rupee closed higher by 33 paise at Rs 55.11/12(55.45/46) against Euro.The local currency shot up by 20 paise to Rs 81.20/21 (81.40/41 ) against Pound Sterling and finished higher by 27 paise against Yen to close at Rs 35.50/51(35.77/78) per 100 yen.

UNI