Rupee ends six paise stronger at 42.40/41 a dollar
June, 03rd 2008
The Indian rupee pared the major part of its early gains but still managed to end the day stronger by six paise at 42.40/41 against the greenback today. At the Interbank Foreign Exchange (forex) market, the local currency moved widely in a range of 42.12 and 42.41 after a strong start at 42.12/13 a dollar following various steps by the government to curb any faster depreciation of rupee against the American currency.
Dealers said the rupee failed to hold on to its gains as local stocks fell sharply pulling down the benchmark Sensex by 352 points, or 2.15 per cent, and on fears of more capital outflows from equity markets.
The rupee had closed at 42.46/47 a dollar on Friday.
They said the domestic unit bounced by a whopping 27 paise on Friday following the government's decision to relax norms for the rupee expenditure of foreign currency loans through the external commercial borrowing (ECB.
The Reserve Bank of India's decision to open a special window for oil companies to buy foreign exchange without disturbing the market dynamics in the rupee-dollar exchange rate also helped reduce dollar demand, a dealer with a public sector bank said.
These measures worked in favour of the rupee during the day but for a sharp fall in stocks due to an imminent fuel price hike at home, they added. PTI