The Hindu : Business : Rupee loses 2 paise

Online edition of India's National Newspaper
Tuesday, Jul 13, 2004

Business

Business

Rupee loses 2 paise

MUMBAI, JULY 12. Despite a firm start, the rupee lost moderate ground against the U.S. currency today on renewed dollar demand from corporates and importers in choppy two-way trading at the interbank foreign exchange market here.

The domestic unit ended at 45.69/70 a dollar, a two paise decline from last Friday's three-week closing high of 45.66/68 after touching the intra-day low of 45.72/73. It, however, opened on a firm footing at 45.63/65, reflecting the U.S. currency's fall against major global rivals.

Notwithstanding positive sentiment for the rupee after the further liberalisation of foreign direct investment regime, a fresh round of heavy dollar short-covering by corporates and importers exerted renewed pressure on the rupee, dealers said. A major demand for dollars came from large offshore oil companies and some defence-related importers, they added. Global crude oil prices eased below $40 a barrel after OPEC promised to raise output by August 1, but was still ruling firm around $39.60 a barrel at the NYMEX.

The Union Finance Minister, P. Chidambaram, provided a further stimulus for liberalisation on the FDI regime by raising the sectoral cap on FDI in telecom, civil aviation and insurance sectors to boost foreign investments.

The rupee appreciated by 18 paise last Friday and scaled a 21-day closing high of 45.66/68 amidst upbeat sentiment in anticipation of attracting foreign funds.— PTI

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