Rupee gains twelve paise against USD during the week

Mumbai, Dec 29: The Rupee gained twelve paise against the US Dollar on strong global cues following the high gains in the Indian equity market in the week ended December 28.

The partially convertible Indian currency firmly ended the week at 39.42/43 per dollar over the previous weekend's 39.54/55 per dollar. The Rupee traded in a wide range of 39.35 and 39.55 per dollar riding the gains and loss in the Indian equity market in the week. Rupee was at gain against American greenback in an active foreign exchange (Forex) market as good fund inflows were witnessed during the week.

Local unit was supported at various levels by the reported intervention by the Reserve Bank of India (RBI). There was strong buying by the PSU banks and importers in the week, dealers said.

However, the local unit eased on Friday on worries about foreign investors withdrawing funds as Asian stocks fell on the rising worries of geopolitical concerns following the assassination of former Prime Minister Benazir Bhutto on Thursday, dealers asserted.

According to market analysts, foreign buying in Indian equity market was one of the key factors, which fueled the Rupee's rise by 12 per cent this year. ''On this account, any concerns on which foreign investors withdraw funds would trigger the currency depreciation,'' said a senior dealer with a leading private bank.

Foreign funds brought around USD 640 million of Indian shares in the first two sessions of this week, after selling USD 1.3 billion of stocks in four sessions last week.

Dealers also expect the Rupee to remain under pressure in the near term as oil refiners buy Dollars in the wake of rising global prices.

UNI