Rupee closes at 43.84/85 per USD

Mumbai, Aug 26 (UNI) The Rupee today closed five paise weaker against the US Dollar at 43.84/85, after hitting a 17-month low on sustained demand for the greenback in the inter bank foreign exchange market.

The Forex market witnessed an extremely volatile session as the partially convertible Indian currency traded in a wide range band between 43.80 and 44.25 per dollar amid bouts of alternate selling and buying, dealers said.

After opening weaker at 44.00/02, Rupee hit an intra day low of a 17-month low at 44.25 per dollar in late afternoon trade on strong corporate buyings. Earlier, it was near this level during the month end of March 2007.

Reportedly, engineering and construction major Larsen&Toubro was seen buying dollars in heavy amount during day trade. Later, the Indian unit came off from its lowest level on suspected intervention by Reserve Bank of India to cap its sharp fall at the level of 44.25 in the late trade, Development Credit Bank's Vice President Navin Raghuvansi said.

He said the month-end demand of dollars by the corporates and oil refineries also created a downward pressure on Rupee against the greenback.

It was an extremely volatile session today, which was not expected by the traders in the market. However, it was expected that local unit's sharp depreciation beyond 44.00 level would be prevented by the central bank, Mr Raghuvansi added.

Meanwhile, the Reserve Bank of India (RBI) today fixed the reference rate for US dollars at Rs 44.07 per unit, up by 49 paise, against yesterday's rate of Rs 43.58 per dollar.

The six-month and annualised forward premium was quoted lower at 2.98 (3.04) per cent and 2.54 (2.59) per cent, respectively.

The Rupee ended the day at 63.87 (64.54) per unit against the Euro. It closed at 80.31 (80.96) per unit against the Pound Sterling. Rupee ended at 39.96 (39.80) per hundred units against the Japanese Yen.

UNI PP OBB SKB1853