Rupee rallies by 14 paise against dollar despite weak equities

Mumbai, Feb 18 (PTI) The rupee today rallied for thesecond straight day and appreciated 14 paise to end at an overone-month high against the US currency, shrugging off the fallin local stocks and a firm dollar overseas.

Forex dealers said that sustained sale of dollars byexporters and banks amid weak equities supported the rupeetrend.

The Bombay Stock Exchange benchmark Sensex tumbled byover 295 points or 1.60 per cent while the dollar index was upby over 0.2 per cent against six major currencies in Europeanmarket today.

Sustained capital inflows too helped the rupee gain, theysaid. Foreign Institutional Investors (FIIs) continued theirbuying during the week, albeit in small lots.

Meanwhile, Global crude oil was trading above USD 86 abarrel in London today.

In a narrow movements at the Interbank Foreign Exchange(Forex) market, the local unit opened strong at 45.25/26 adollar from previous close of 45.34/35.

It later touched a high of 45.15 in line with initialrise in domestic equities where the benchmark Sensex was up byover 184 points.

However, dollar selling after morning deals by exportersand some banks amid weakness in equities pulled the rupee downto a low of 45.30 before recovering some ground to conclude at45.20/21, still higher than previous close.

The rupee premium for the forward dollar rose on freshpaying paying pressure from banks and corporates.The benchmarksix-month forward dollar premium payable in July settled up at126-128 paise from Thursday''s close of 123-1/2-125 paise.

Far-forward contracts maturing in January also finishedhigher at 259-261 paise from 255-257 paise previously.

The Reserve Bank of India has fixed the reference ratefor the dollar at Rs 45.18 and the euro at Rs 61.43.

The rupee fell back to Rs 73.25/27 against the poundsterling from Thursday''s close of Rs 73.13/15 while improvedfurther to Rs 61.29/31 per euro from Rs 61.48/50 previously.

It also inched up against the yen to Rs 54.22/24 per 100yen from last close of Rs 54.23/25.