Rupee weaker by seven paise at 46.41 against USD

Mumbai, Sep 18 (UNI) The Rupee today ended weak at 46.41/42 against the US dollar with a small loss of seven paise, helped by dollar selling by the Reserve Bank of India and recovery in the local stock market.

The Indian unit resumed low at 46.64 and later fluctuated between 46.42 and 46.80 during the session. The partially convertible rupee ended at 46.42/43 per dollar, still 0.2 per cent weaker than 46.34 at yesterday's level.

The stock market rebounded from sharp early losses and snapped a seven-day losing streak, as domestic funds stepped in to pick bargains. But the outlook remained shaky on deepening global financial woes.

However, dollar demand from oil firms continued to pressure the rupee downwards, dealers said. Refiners, the biggest buyers of dollars in the local currency market, have been trying to meet import requirements, as oil prices have started rising again.

Dealers said offshore-related dollar demand from banks also hurt the currency. Banks generally buy dollars locally and sell offshore to take advantage of the high price differential.

One-month offshore non-deliverable forward contracts were quoted at 46.79/89, 0.8 per cent weaker than the onshore spot rate, providing a good arbitrage opportunity.

In the currency futures market, the most heavily traded near-month contract ended at 46.4825. The volume was a heavy 79,520 contracts.

Meanwhile, the Reserve Bank of India (RBI) today fixed the reference rate for US dollar at Rs 46.71 per unit, edging up by 37 paise, against yesterday's rate of Rs 46.34 per dollar.

The reference rate for Euro rose by Rs 1.16 paise at Rs 66.98 per unit, from yesterday's close of Rs 65.82 per unit, a RBI release stated.

However. The six-month and annualised forward dollar premium was quoted lower at 0.67 (1.29) per cent and 0.62 (1.15) per cent respectively.

The Rupee ended the day a loser at 67.20/22 (65.56/58) per unit against the Euro. It closed at 84.66/68 (82.53/55) per unit against the Pound Sterling. Rupee ended at 44.28/30 (43.75/77) per hundred units against the Japanese Yen.

UNI AR OBB VKG1830